'A clear signal of faith': how Wall Street reacted to Musk's buyout of Tesla shares

Tesla CEO Elon Musk's unexpected purchase of nearly $1 billion worth of Tesla shares was an act of support for the unstable electric car maker and laid the groundwork for a strong end to 2025, analysts say. Investors took the billionaire's deal with great positivity: Tesla shares were up 7.5% at the moment in trading on September 15. The share purchases followed Tesla's announcement of its intention to put Musk's new compensation package, which could reach about $1 trillion, to a shareholder vote.

- "We see this as a clear signal of confidence from [CEO] Elon Musk," William Blair analyst Jed Dorsheimer told CNBC. - With this deal, rising delivery expectations and the robotaxi launch, our view on the stock is increasingly optimistic."

- "[Musk's] Form 4 filed with the SEC on Sept. 12 complemented Friday's strong technical breakout," Morgan Stanley said in a Morgan Stanley note quoted by the wire service. The automaker's securities rose 7 percent on Sept. 12 on the news that the company's board of directors still supports Musk.

The bank notes that investors have too small a stake in Tesla shares compared to the benchmark, there was a catch-up factor in the market trading in the AI sector, there was also excitement around a fresh update to the FSD 14 driver assistance system, optimistic comments on demand for the updated Model Y came out, and the board signaled its intention to pay Musk a reward of up to $1 trillion if targets are met. "All of these form a powerful combination of factors ahead of the quarter's close," Morgan Stanley analysts explained.

- "[Such insider activity] is a strong signal to Tesla optimists and evidence that Musk is doubling down on artificial intelligence within the company," said Dan Ives, global head of technology at Wedbush. He also emphasized that Musk's stock purchase is further evidence that the company's CEO has "passed the peak of his involvement in politics."

- "If you're a bit skeptical of Tesla's robotics projects, this is simply Elon buying shares to demonstrate his commitment to the company and to win approval of the recently proposed pay package," Horizon Investments analyst Dmitry Shlyapnikov told Bloomberg. However, for those who believe Tesla's Optimus robots could go into production in large numbers in the near future, Musk's deal is an optimistic signal, the analyst said.

Elon Musk on September 12 through a trust fund bought 2.57 million shares of Tesla at various prices, documents published on September 15 showed. The purchase amounted to about $1 billion. This is the largest purchase of Tesla shares by Musk in monetary terms, notes CNBC, citing data from the consulting company Verity. In general, such purchases are rare for the entrepreneur. The last time he bought shares on the open market in February 2020 - then he bought about 200,000 securities for about $10 million. Before the last deal Musk owned about 13% of Tesla shares.

Tesla is trying to reverse the negative trend after a tough first half of 2025. Many analysts believe Musk's political activism has hurt the electric car brand and affected sales, CNBC writes. Musk has stopped working for the White House, but on September 13 he supported via video link a rally in the UK Unite the Kingdom organized by far-right activist Tommy Robinson. A spokesman for British Prime Minister Keir Starmer called Musk's remarks on the occasion inflammatory and dangerous.

Tesla's car business continues to come under pressure. According to estimates by research company Cox Automotive, Tesla's share of the US electric car market fell below 40% in August. At the same time, registrations of new Mark cars continued to decline in major European countries, and deliveries from the company's plant in Shanghai declined both in July and August.

On Monday, September 15, Tesla shares rose by 3.6% to $410. The stock reached its highest closing level since January 23. The rally over the last two trading days allowed Tesla shares to finally recover all losses and get into the plus side compared to the beginning of 2025. Now they are 1.54% more expensive than they were at the beginning of January. For comparison, the main U.S. index S&P 500 added 12.5% over the same period.

Compared to a low of $221.86 (at the close) in 2025 on April 4, the stock has added 85%. This is the second year in a row that Tesla has recovered from a weak first quarter, CNBC notes. Last year, the stock fell 29% in the first three months, but added 63% through 2024.

This article was AI-translated and verified by a human editor