Tesla (TSLA 1.24%) revealed in an SEC filing yesterday that the automaker closed its recently announced stock offering, raising $2.31 billion to strengthen its balance sheet. Investors and underwriters eagerly bought up shares, despite the fact that Tesla stock is far more expensive today than it was six months ago.
Among those buying shares in the stock offering was none other than CEO Elon Musk. While his purchase was small relative to the $2.31 billion Tesla raised, it's still notable given how much of the CEO's wealth is already tied up in the company.
Musk bets on Tesla stock
The CEO bought about $10 million worth of shares on Feb. 14, Tesla revealed in a filing with the Securities and Exchange Commission (SEC) yesterday. More specifically, Musk purchased 13,037 shares of the company's common stock offering, paying an average of $767 per share.
Musk's purchase of Tesla shares wasn't a surprise. When Tesla announced its stock offering earlier this month, Musk had said he planned to buy up to $10 million of the stock. Board member and Tesla shareholder Larry Ellison had also indicated interest in buying up to $1 million worth of stock. Ellison similarly followed through and bought 1,250 shares at $767, bringing Ellison's total share count to more than 3 million.
After buying more than 13,000 more Tesla shares, Musk now owns a total of about 34.01 million shares, giving the CEO an 18.5% stake in the company. With Tesla shares trading at $891 per share at the time of this writing, about $30.3 billion of Musk's $43 billion net worth is tied up in Tesla.
While Musk's $10 million purchase of Tesla stock on Valentine's Day might be small relative to the entrepreneur's total net worth, it draws attention to the CEO's continued no-joke long-term bet on the electric-car maker's success.
Buying at the high
Though shares of Tesla have risen another 16% since Musk and Ellison bought shares of the automaker on Valentine's Day, their purchase price was still a high price tag to pay compared to where shares were trading just six months ago. At one point in August, Tesla stock traded close to $210.
The fact that investors and underwriters quickly bought up Tesla stock in the high $700s highlights the growing confidence the Street has in the company's long-term prospects. Investors have been pleased with Tesla's soaring Model 3 deliveries and a Model Y launch that is ahead of schedule. In addition, Tesla built a new factory in China in less than a year, bringing attention to the company's blistering pace of execution.
Musk's $10 million purchase of Tesla stock suggests he remains committed to holding onto his stake for the long haul -- even at these higher levels.