Entrepreneur Elon Musk bought a little over $5 million worth of shares of solar installer and financier SolarCity on Monday, according to insider stock filings. Musk is SolarCity’s chairman and a major shareholder along with serving as CEO of both electric car company Tesla and SpaceX, a space cargo firm.
As Bloomberg pointed out, Musk’s stock purchase came at a time when SolarCity’s shares had fallen to a 22-month low, and a couple of days after hedge fund manager Jim Chanos said he was short on the company. Chanos, whose bet meant he would profit if SolarCity’s shares fell in value, called it a “subprime financing company.”
On Monday, Musk bought 123,510 shares of SolarCity at $40.49 per share, increasing his holdings by 0.6%. He now owns nearly 21 million shares, which at a mid-day Tuesday price of $45.44 per share, are worth close to around $945 million.
SolarCity is by far the largest U.S. installer and financier of solar panels. According to data from research firm GTM Research, SolarCity has a 34.4% marketshare in installing solar panels in the U.S., and 27.2% marketshare in installing solar panels. Competitors include Vivint Solar, which is being acquired by clean energy giant SunEdison (SUNE); Sunrun (RUN), which just went public; and Sungevity.
The market for solar panels that provide power to U.S. homes, businesses and utilities is growing rapidly. More solar panels were installed on U.S. home rooftops in the first quarter of this year than ever before, according to the Solar Energy Industry Association, an industry group .
But the U.S. solar installation industry is also facing a difficult market. The industry, which has been filled with competitors, is consolidating. Furthermore, profit margins are slim on residential rooftop installations. SolarCity lost over $156 million for the most recent quarter on $103 million in sales.
SolarCity is spending heavily on an expansion including building a solar cell manufacturing facility in upstate New York. With its new “Gigafactory,” the company will become a solar cell maker for the first time in its history.
On Tuesday, SolarCity’s shares (SCTY) were up over 3%.