Elon Musk Buys $5 Million of SolarCity Shares After Plunge By Bloomberg
Musk's purchase comes after Chanos reveals short position.
Elon Musk, the billionaire chairman of SolarCity Corp. and the company's biggest shareholder, increased his stake after the top U.S. installer of rooftop power plants fell to a 22-month low.
Musk bought 123,510 shares at a price of $40.4855 each, according to a regulatory filing Monday after the close of regular U.S. trading, boosting his holdings by about 0.6 percent.
Musk expanded his position after hedge fund manager Jim Chanos said Friday that he's short on the company, triggering a rout that drove the shares down 13 percent. That was the biggest decline since November 2013 and the lowest price since October 2013. SolarCity rebounded 7 percent to $43.87 at the close in New York Monday.
Chanos called San Mateo, California-based SolarCity a "subprime" finance company on CNBC Friday. The company's Chief Executive Officer Lyndon Rive responded by saying the average credit score of a SolarCity customer is 750, far above the 640 score considered to be more risky.
Traders who expect a stock price to drop can short a company by borrowing shares to sell later at a lower price.
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