Tesla CEO Musk Buys $10 Million In TSLA Stock

Tesla CEO Elon Musk

MAY 9 2018 BY STEVEN LOVEDAY 29

Yes, Tesla CEO Elon Musk has once again dipped into his own cash flow to buy up a nice chunk of TSLA stock.

Musk has certainly been commenting on the company’s stock as of late. He likes to make pokes at short sellers from time to time. In a recent social media post, the CEO acted as though he was trying to help these stock shorters by warning that there will soon be a “next level short burn of the century.”

Related: Renowned Investor Predicts 2020 Tesla Stock Price Of $1,000

What does this mean? It’s assumed that Musk is implying that people will be in a huge hurry to get rid of TSLA stock rapidly when prices go on a huge upward surge. Of course, this type of comment causes all sorts of speculation. Does Tesla have a big reveal coming soon? Is Model 3 production really going to ramp up exponentially? What gives?

Read Also: Tesla’s Stock Success Has Cost Short Traders BillionsElon Musk

We honestly have no way of knowing for sure what Elon’s intentions are with this warning. However, what we do know from a recent SEC filing is that the CEO himself just bought up $10 million in TSLA stock. These 33,000 shares are not part of the usual allotment that he is entitled to through various compensation plans. Instead, he dipped into his own bank account to purchase the stock.

It’s hard to say exactly how these recent comments, and now the CEO’s big buy may impact the market cap and short seller situation. We shall see as time progresses.

Let us know what you think the story is …

Why did Musk suddenly spend on stock? What does he have up his sleeve? We’d love to hear your thoughts in the comment section below or on our Forum.

Keep the conversation going on our Forum. Start a new thread about this article and make your point heard.

Source: Electrek

Categories: Tesla

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29 Comments on "Tesla CEO Musk Buys $10 Million In TSLA Stock"

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When the short sellers want to cash out, they need people to sell them their stock. If all (or the vast majority) of stock holders are in for the long run, then short sellers will find it difficult to buy stock and the price will keep increasing until they get someone to sell them their stock. Elon buying 33k shares means that he’s just increased the percentage of long term investors which puts even more pressure on the short sellers.

This is not entirely correct & is not how selling short works…

You can be short on a stock in several ways. One is to sell a call option (the right to buy this stock from you on a later date for typically todays price or more, because you expect it to fall). If you sell a call while you don’t own tesla stock, you will have to buy it if your price is met.

I expect nothing less than a “Volkswagen in 2008” kind of short squeeze.

In other words its gambling LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

It was meant as an instrument to lower your risk or get some liquidity out of your portfolio/goods in times of need. You can also see it as an insurance against price jumps (up or down).

Is a health insurance carrier gambling if he sells you a health insurance? Some would say he is betting that you stay healthy. Others would say that he carefully calculated how much health treatment a typical person needs in her life, than he sets the insurance fee just a little bit higher. So he gets a profit and people who need a little more care than others are covered too. Since you mostly don’t know how your health will be in the future, I could say you are gambling too – no matter if you get an insurance or not. The one way you are betting on your good health, the other on a higher need for medical care. Or you could see it as a product: you are buying easy of mind regarding health cost worries.

Do you end all your comments with “LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS”?

If course insurance is a gamble. The insurance company plays the odds, according to actuarial tables, gambling that they’ll get more in premium payments from the customer than they’ll have to pay out over the lifetime of the policy. The customer gambles that he’ll wind up getting more in an insurance payout than he’s paying in premiums. Most often, the insurance company wins the bet. If they didn’t, they would go out of business — which happened to a lot of home insurance companies after the Katrina disaster!

Also of course, insurance companies don’t like it when you characterize their business as “gambling”, because they advertise it as buying protection (Traveler’s Insurance’s logo is an umbrella), and their companies as being solid and stable (Prudential’s logo is “The Rock of Gibraltar”). The term “gambling” implies risk, and the image they want to project is the opposite of risk!

“This is not entirely correct & is not how selling short works…”

It is more complex than that, true. But Mil is correct to say that Elon buying $10 million more in Tesla stock will indeed put more pressure on TSLA stock shorters, but I think more because it indicates to investors his personal confidence that the stock price will soon rise.

Right, Mil. You can’t short shares without “borrowing” them, in the United States. (I understand you can “naked” short in Germany, ala VW/Porsche, but that was different). Musk likely does not custody his stock with a firm that participates in stock lending, which is to say no one can borrow his shares. If it were as easy as checking a box, I wouldn’t let my custodian do it either. These days, most brokerages provide print saying your shares may be lent out. Sadly, this is most likely true for most long-term holders. It could be a fascinating short-squeeze, if folks consciously paid more for custody and transferred their long positions to institutions that refused to lend. Instead, it is likely that if you own shares of Tesla, your bank collects an interest rate from those who have been borrowing your shares, to then turn around and sell.

I understand that you can prevent your shares from being lent out by putting in a sell order, at a very high price so they don’t get sold, let’s say $1000, because shares that are marked to be sold can’t be lent out.

They borrow the stock for a fee to sell, then buy it back at a lower price to replace.

I don’t think he has anything up his sleeves for the next weeks, because buying stock before a positive announcement as an insider of the company (which a CEO is), would be illegal.

I think that he just wanted to put (in his dimensions) a little weight against the down dip of the stock he may have caused unintentionally by being a little uncouth to some analyst questions.

Also: an unwritten rule at Wall Street is that huge pileups of cash are going to be taken down. We saw it in February with volatility products (SVXY, XIV and so on), which did swell up massively and got taken down – and we will see it with the overly shorted tesla stock as well.

What are you talking about? Health insurance is health insurance shorting stocks is gambling LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS
Yes I do end 99% of my comments with LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

“I don’t think he has anything up his sleeves for the next weeks, because buying stock before a positive announcement as an insider of the company (which a CEO is), would be illegal.”

That’s quite true. So we shouldn’t expect Tesla to announce a deal for its new China factory within the next week or two.

All the Tesla haters and shorters are mad right now TSLA $303 WOW LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS or you can buy Ford at $11 LOL

Where is Bob Lutz aka bro1999? He must be depressed today LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

Hey bob Lutz aka bro1999 buy some GM for $36 LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP

This is a recipy for disaster.
Big problem.

Thiis is fake Bob Lutz the real one is Bro1999 LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

Will the real Bob Lutz please stand up ‼️

Also, Elon is 1 for 1 predicting short squeezes.

If I were short TSLA, I would be extremely nervous!

Seems to me he had to do something to restore trust after all the problems Tesla has been having lately aggravated by Elon Musk’s little communication mishap in the last conference call.

Damage control…

What damage control? Musk told day traders to kiss his lily white ARSE period LOL but for some unknown reason TSLA is at $300. No damage was done from conference call CONNECT THE DOTS ON CLEAN AIR WAKE UP

Elon knows how and when to damage a little the short value of TSLA, so he send expensive before, then he jokes or do baf conference on radio, twitter…
Haters do their job for free, telling us bankrut…etc
TSLA downs and Elon spend his money buying stock before a positive announcement as an insider of the company (which a CEO is), and stock value goes up up up and Elon richer tjan before.
Only Elon can do it, or thats and old game…

Correction tsla is $305 per share wow, tesla shorters and haters are steaming mad today LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS

Ford (others?) backing off sedans is bullish for Model 3, and no one is writing about it.

He should have bought the stock when the price suddenly dropped more or less overnight by 10-15%, a few weeks ago. But perhaps he couldn’t because that might have given the appearance of stock manipulation? Not sure how many FEC restrictions there are on company principles buying and selling stock.

He has to file paperwork before he can buy.

Musks style of pushing stock value is borderline illegal. Buying stock, than saying folks that there might be something secret that will make the stock rise. He is CEO of a company… be quiet or make an official and transparent announcement. People interested in buying Tesla deserve transparency. Without you can only guess, his talk is mostly hot air, as everything else would be highly problematic. I think Tesla plans to get new money and therefor tries to pump up its value (cash gets cheaper).

I’ve read that the Tesla corporate rules mandate a 2/3 majority to make substantial changes in the corporation. So Elon currently owns 27 percent. If he can get to 33 percent, any sort of loss of control of Tesla becomes impossible. So, it’s part of a long term plan to grow his percentage of the shares, maybe.

Likely it’s just part of a long term plan to increase his share of the corporation?