Billionaire entrepreneur Elon Musk has acquired another $10 million worth of shares of solar tech installer SolarCity, according to a filing. While Musk bought the shares on Friday, SolarCity’s jumped on Wednesday by over 23.46% at one point to $22.60 during morning trading.
Musk, who is chairman of SolarCity and CEO of electric car maker Tesla Motors, bought the shares when SolarCity’s stock hit $17.56 per share. That was one of the company’s lowest trading prices in three years.
Musk’s acquisition could be giving investors confidence in SolarCity (SCTY) as a long-term investment. In addition, Musk—who helped create the company along with his cousins Lyndon and Peter Rive—could see the low stock price as a good deal to buy up shares when they’re particularly cheap.
Three days before the billionaire entrepreneur bought the stock, SolarCity’s stock cratered, dropping over 30% on missed guidance and slower growth. While SolarCity had previously predicted a year of dampened growth in 2016, investors were disappointed in the number of solar panels the company installed in 2015 as well as in SolarCity’s prediction that its losses would continue to expand over the first quarter of this year.
WATCH:SolarCity’s efficient, affordable solar panel:
Musk now owns 21.85 million shares of SolarCity, which at a trading price of $22.60 are worth about $494 million. Last year, SolarCity traded as high as $63.79, which would make those same amount of shares worth about $1.40 billion. Musk bought another $10 million worth of shares back in December when SolarCity was trading at $33 per share.
SolarCity has seen rapid growth in the amount of solar panels it has installed in the U.S. Over the past several years. But as competition has become heated, and an important federal subsidy for solar is scheduled to expire in the coming years, SolarCity has said it plans to see more modest growth in the future.
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At the same time, SolarCity has been building a huge solar panel factory in upstate New York, which will churn out solar panels and eventually help the company lower its costs per solar panel installed. It’s an ambitious, and somewhat risky, move to try to bring solar panel production in house when huge solar panel makers have spent years making panels increasingly cheap.
If you believe in the long-term vision of SolarCity as a successful, completely vertically-integrated panel maker and installer, then the company’s low stock price might seem like a steal. If you’re skeptical of the vision, then the low price probably seems just about right.