Larry Ellison now has Tesla stock worth $1.6bn after huge rally
And Elon Musk’s fortune has swelled $3.9bn so far in January, boosting his net worth to $31.5bn
London — Larry Ellison’s faith in Tesla and his friend Elon Musk is being rewarded.
The Oracle chair bought three-million shares of the electric-vehicle maker before joining Tesla’s board in December 2018. The stake — worth $1bn at the time — is now worth more than $1.6bn. The stock has surged 25% in just the first two weeks of 2020 as fourth-quarter vehicle deliveries exceeded estimates and Musk started handing over locally assembled cars to customers in China.
For most of 2019, Ellison’s investment was floundering as Musk, Tesla’s CEO, bounced from crisis to crisis and Wall Street cast scepticism on consumer demand. On the day Ellison’s holding and his appointment to the board were disclosed, the shares closed at $333.87. By June, they had plunged to a low $176.99. They’ve almost tripled since and traded up as much as 4.2% before the start of regular trading Tuesday.
The rally is bringing Tesla even closer to a $100bn market capitalisation, the threshold that would unlock the first tranche of Musk’s all-or-nothing pay package approved in March 2018. The company will have to sustain that value for months for the CEO to get his award worth about $346m.
At least one investor may have less reason to rejoice. Saudi Arabia’s sovereign-wealth fund hedged most of its 5% stake in Tesla through an arrangement with JPMorgan Chase last January, according to the Financial Times. That helped protect gains when the share price was below about $350, but the country would have missed out on the recent rally, assuming the hedge remained in place.
Musk himself has most to cheer. His fortune has swelled by $3.9bn so far in January to the end of Monday, boosting his net worth to $31.5bn and making him the world’s 28th-richest person, according to the Bloomberg Billionaires Index.