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Elon Musk Finalizes His Tesla Motors Inc (TSLA) Purchase, so Is Now the Time to Buy?

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On May 30, Tesla Motors Inc (NASDAQ:TSLA). officially received a large bump in confidence from the company’s CEO. Mr. Elon Musk carried through with his well-publicized commitment to buy $100,000,000 worth of common stock according to the Form 4 filed here. The filed document noted that 487,857 shares were purchased as part of the public offering closed on May 22. The remaining 596,272 shares were purchased directly from the issuing company in a private placement on May 30.

Tesla Motors Inc (TSLA) Gets Five-Star Rating: Should Ford Motor Company (F), Other Competitors Worry?

Two weeks prior on May 15, the company issued a press release indicating that the CEO would lead the common stock offering as the electric car manufacturer released plans to raise an expected $830 million in stock and convertible senior notes that are due in 2018. Altogether, this latest insider purchase raises Musk’s holdings in Tesla Motors Inc (NASDAQ:TSLA) to 28,287,366 common shares owned through The Elon Musk Revocable Trust. At today’s prices of $97.76, this brings Musk’s controlled position in the company to a total of $2.77 billion. The average purchase price of his latest transaction was at $92.24, representing a discount of 5.6% to the current price.

As previously announced, the offering would allow the growing company the ability to pay back the loans issued in 2010 by the U.S. Department of Energy. On May 22, Tesla Motors Inc (NASDAQ:TSLA)’s followed through in doing so as the company used a portion of the $1 billion in funds raised from the offering. The repayment makes Tesla Motors Inc (NASDAQ:TSLA) the only American car company to have fully repaid the government

Ironically, the electric vehicle industry hasn’t exactly been something to boast about as it continues to face relatively weak demand across the board. While American manufacturers General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) support their own electric car lines (the Chevy Volt and the Ford Motor Company (NYSE:F) Focus Electric, respectively), neither has managed to truly live up to their expectations.  General Motors Company (NYSE:GM) had hoped to sell 40,000 Volts in the United States for 2012 but came up short by selling only 23,461. The company even stopped its production line for five weeks in order to realign its supply with its demand. For its part, Ford Motor Company (NYSE:F) stated that its battery-electric vehicles will only make up 5% of the 100,000 electrified vehicle sales it expects to have. This assigns a high-end expectation of only 5,000 units and thus far the demand has proven to be weak. In all of 2012, the company only sold a mere 685 Focus Electrics.

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