(Bloomberg) -- Larry Ellison’s faith in Tesla Inc. and his friend Elon Musk is being rewarded.
The Oracle Corp. chairman bought 3 million shares of the electric-vehicle maker before joining Tesla’s board in December 2018. The stake -- worth $1 billion at the time -- is now worth more than $1.6 billion. The stock has surged 25% in just the first two weeks of 2020 as fourth-quarter vehicle deliveries exceeded estimates and Musk started handing over locally assembled cars to customers in China.
For most of 2019, Ellison’s investment was floundering as Musk, Tesla’s chief executive officer, bounced from crisis to crisis and Wall Street cast skepticism on consumer demand. On the day Ellison’s holding and his appointment to the board were disclosed, the shares closed at $333.87. By June, they had plunged to a low $176.99. On Tuesday, the stock rose as much as 4.3% at the open to a new intraday high of $547.41.
The rally is bringing Tesla even closer to a $100 billion market capitalization, the threshold that would unlock the first tranche of Musk’s all-or-nothing pay package approved in March 2018. The company will have to sustain that value for months for the CEO to get his award worth around $346 million.
At least one investor may have less reason to rejoice. Saudi Arabia’s sovereign-wealth fund hedged most of its 5% stake in Tesla through an arrangement with JPMorgan Chase & Co. last January, according to the Financial Times. That helped protect gains when the share price was below about $350, but the kingdom would have missed out on the recent rally, assuming the hedge remained in place.
Musk himself has most to cheer. His fortune has swelled by $3.9 billion so far this month through Monday, boosting his net worth to $31.5 billion and making him the world’s 28th-richest person, according to the Bloomberg Billionaires Index.
(Updates share price in third paragraph.)
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