Tesla's shares were up before the market opening on Monday, after CEO Elon Musk revealed the purchase of over 2.5 million shares worth approximately $1 billion, as reported by AP.
The electric vehicle manufacturer's shares increased by over 7% in pre-market trading.
Musk bought various amounts of shares at different prices on Friday, according to a regulatory document. The move can be interpreted by the markets as a sign that the billionaire continues to have confidence in the company's future.
Earlier this month, Tesla proposed a compensation package for Musk that could potentially make him the world's first trillionaire if the company achieves a series of extremely aggressive goals in the next decade.
Tesla stated in a regulatory document that it will grant Musk shares worth up to 12% of the company in a dozen separate packages if the company meets certain performance targets, such as massive increases in car production, stock price, and operating profit. If shareholders approve the new compensation package, it could make Musk the world's first trillionaire and mark a new level of disproportionate compensation in a country already known for extreme pay. However, the reward is in shares, not cash, and the goals are also extreme.
To receive his first 1% share package of the company, Musk would have to convince stock market investors that Tesla is worth a total of two trillion dollars, double its current valuation, and also achieve several other milestones. To receive all the offered shares and become the world's first trillionaire, the market value would need to increase to $8.5 trillion, double that of the current most valuable company in the world, chipmaker Nvidia.
Tesla has seen a decline in sales this year, largely due to the negative reaction to Musk's proximity to President Donald Trump. Tesla also faces increasingly intense competition from major Detroit automakers and particularly from China.
Investors have become increasingly concerned about the company's trajectory after Musk spent so much time in Washington this year, becoming one of the most prominent officials in the Trump administration in his attempt to reduce the size of the U.S. government.
Tesla is scheduled to hold its annual shareholders' meeting on November 6, where investors will vote on the new compensation package.