As Tesla Motors Inc. is gearing up for the unveiling of its most affordable car to date, the Tesla Model 3, the company's chief executive Elon Musk has reinvested into Tesla in an unprecedented manner: using his own money to exercise his stock options and cover the taxes on shares.
The move has increased Musk's shares in the electric car company. According to FactSet, his shares had amounted to 21.7 percent in August last year.
"This week Elon increased his investment in Tesla," confirmed a Tesla spokesperson. According to the source, Musk has converted 532,000 of his stock options into stock, where each was valued at less than $7 per share.
An SEC filing that details the transaction revealed that Musk now owns more than 28.9 million shares, which would be worth over $5.5 billion or $100 million on Friday's closing price. The company's shares currently trade at about $192.
The spokesperson said the Tesla CEO used more than $50 million in cash to pay for the taxes to exercise his stock options, and apparently, he did not sell any of his shares.
Experts say Musk's timing is just right. As automotive enthusiasts are awaiting the company's new Model X gull wing SUV and the new Model 3, Tesla stocks have dropped $50 apiece since achieving over $240 in December 2015.
Musk has owned the right to exercise stock options since December 2009, even before Tesla went public. According to the SEC filing, the options were priced at exactly $6.63.
Musk owns one-fifth of Tesla, and the company is expected to unveil its much anticipated "mainstream" Model 3 in March.
The Tesla CEO said earlier this week, "[it's] going to be probably the most profound car that we make."
Production of the Model 3 will begin in 2017. Its base model is estimated to cost $35,000, and will have a range of at least 200 miles.
According to Chicago Tribune, Model 3 will probably be equipped with sensors for autonomous driving. Aside from that, the new model is expected to take Tesla's 50,000 vehicle sales and increase it to 500,000 in 2020.
In other news, Tesla quietly hired a microprocessor engineer who formerly worked at AMD and Apple. Engineer Jim Keller is now the vice president of the company's Autopilot Hardware Engineering department.
