Elon Musk has been vocal about Tesla’s stock lately and he has even been warning people who are betting against the company on the stock market that they are about to get ‘burn’.
Coincidently (or not), the CEO bought $10 million worth of Tesla stocks, today.
Over the last few months, short sellers on Wall Street have been building up massive positions against Tesla.
As of the last report, the bet was worth as much as $12 billion and short sellers are starting to have issues finding shares to borrow, which increases the borrowing fees.
Last week, Musk warned of a ‘next level short burn of the century’ – meaning that he predicts short sellers will rush to exit their position as Tesla’s stock price increases.
Throughout the day today, Musk ended up buying 33,000 Tesla shares worth close to $10 million, according to a SEC filing:
This is interesting for a few different reasons.
First off, it’s particularly interesting because of Musk’s recent comments on a short squeeze.
Most of Musk’s transactions on Tesla’s stock have to do with his stock options through his compensation plans, but this particular series of transactions have nothing to do with that based on the SEC filing.
It means that Musk took $10 million of his own money to invest again into Tesla.
Now that’s just a drop in the bucket of the company’s market capitalization and Musk’s own stake in the company, which is worth over $10 billion.
But it shows that he might be trying to play the short squeeze that he himself is predicting is going to happen. Of course, his own buying pressure and the fact that he is seen buying more shares could even potentially help a short squeeze.
There’s also another reason why the purchase is interesting. It could mean that Tesla doesn’t have anything unannounced that is coming to light in the short term. Due to insider trading rules, it would be risky for Musk to make such a transaction before any major announcement.
It’s something to keep in mind.
What do you think? Let us know in the comment section below.