Elon Musk buys $1B in Tesla stock: What it signals to investors

00:00 Speaker A

All right, when billionaires bet on themselves, a charge has been sent through Tesla’s stock on news Elon Musk bought 2.57 million shares at various prices on Friday for a total of about $1 billion. Purchases are rare from Musk, who last purchased $10 million of Tesla’s shares back in February 2020. So my question of the day is this, if Elon is buying Tesla, should you? And Nez, I got a good note from uh William Blair analyst Jed Dorsheimer just now in my box. He says, these buys are a a clear sign of confidence by Musk in the outlook for Tesla.

00:46 Inez

100% and it’s a sign that he is all in, especially after the company’s board proposed that massive pay package with some really lofty targets in there. So the fact that he has bought these shares is a sign of a big vote of confidence for Tesla and a sign that he is totally ready to go all in.

01:14 Speaker A

Uh Ali, if it uh uh uh if uh Elon was on this panel today, if you imagine just popped up on screen. I would ask him this, are you buying the stock more so on a play on robo taxis and robots than the traditional car business? I mean, I think it’s a question uh worth asking for. I I personally think he’s buying this as a play or bet on robots taking over the world and the industrial community.

01:46 Ali

Yeah, I would agree with you there and that’s what Wall Street has said as well, right? Tesla is a longer-term story. We were just talking about Apple maybe being that longer term story when it comes to AI. I think Tesla is that that play that you want to be exposed to when we do have that autonomous driving really start to pick up, the the robotics, everything that you were just mentioning. That is where all the Tesla bulls have really been focused on over the past few months even as the stock has struggled in the short term. The car business, it’s just lag. It’s not doing great overseas. You have a lot of that competition. Here in the US, the infrastructure is just not fully there yet for widespread adoption. And then you have the expiration of those EV tax tax credits. That’s been an overhang on the stock as well. But if you look out to the future, there are a lot of tailwinds, there are a lot of potential catalysts. And to Inez’s point, this shows Elon Musk is all in. Before shareholders were getting a little nervous that he maybe had his hands in too many things that wasn’t totally focused on Tesla. I think this can give shareholders the confidence that he is committed and he’s looking out to the long-term here.

03:00 Speaker A

Kelly, uh last quick word to you. When an insider buys or sells, what does that mean to you?

03:06 Kelly

Well, I’m going to be repeating here, but I think it’s a show of confidence especially with a company that is so founder oriented and so leader oriented right now. And I’m not sure if this has been mentioned yet, but Elon hasn’t bought shares since 2020. So that probably gives you some indication of how he feels about the stock going forward. But I go back to my earlier comments here. Tesla is a growth stock. I would definitely put it in the growth stock bucket. Is it a time to invest in growth? I’m not so sure with the economy slowing down, so this might be more of a temporary pop.