According to the preliminary results revealed by Musk, the $56 billion compensation plan is almost a done deal; Famous Tesla investor Gary Black expects Tesla to rebound 3-5% in the coming days; he also added that Tesla's self-driving Robotaxi, which will be launched in August, will be the next uncertain factor.
The controversy over Elon Musk's $56 billion sky-high compensation package has been a hot topic for Tesla this year, and this controversy is about to come to a final conclusion.
The Tesla annual shareholder meeting will be held on Thursday, June 13th local time and will announce two key resolutions, including whether CEO Musk's $56 billion compensation package will be voted on and the other related to whether Tesla's registered office will be moved from Delaware to Texas.
As of now, the person involved, Musk, has posted preliminary results, stating that the two key proposals relating to the re-approval of his compensation package and the relocation of Tesla's statutory address from Delaware to Texas are currently being passed with 'a significant advantage'.
Earlier, Gary Black, a well-known Tesla investor and managing partner of Future Fund, predicted that Musk's $56 billion compensation package will 'easily pass' at Thursday's annual shareholder meeting, with most shareholders expected to vote in favor once again.
3-5% rebound.
The cause of the event occurred earlier this year. Musk's compensation plan was initially approved by Tesla's board of directors in 2018, but in January of this year, a court of equity in Delaware found Musk's compensation 'incredible' and revoked Musk's compensation package plan.
After the judgment was announced, Musk ranted 'never register a company in Delaware' and suggested registering in Nevada or Texas.
Earlier this month, Robyn Denholm, chairman of Tesla's board of directors, hinted in a letter to shareholders that if Tesla shareholders ultimately rejected Musk's high rewards, Musk might leave Tesla.
With the release of the preliminary results, the passage of the compensation package plan is almost a foregone conclusion. A favorable voting result eliminates any concerns about Musk leaving the company.
Gary Black of Future Fund posted on social media platform X that Tesla is expected to rebound 3-5% in the coming days. In addition, Black also pointed out, 'I cannot imagine that Chief Justice Kathaleen St. J. McCormick of the Court of Equity will overturn Tesla shareholders' will a second time.'
As of press time, Tesla's stocks have risen by more than 7% during regular trading hours.
Future uncertainty.
So, after this potential surge, where will Tesla's road go? Black pointed out that investors' attention will shift back to the company's second-quarter delivery volume, but he expects second-quarter deliveries to be lower than the same period last year.
He also pointed out that Tesla's 'uncertainty factor' will be the 'Robotaxi' unmanned taxi released on August 8th.
The impact of Robotaxi on the stock price will depend on whether Tesla can release the 'unsupervised version' of its fully automatic driving system (FSD), which will enable cars to truly achieve autonomous driving. Currently, although Tesla's software can perform most driving tasks, it still requires human drivers to pay attention to the road and intervene when necessary.
'We are still positive about Tesla, but we will not be complacent,' Black said.
However, Wall Street seems to disagree. Tesla has been downgraded by Deutsche Bank and Barclays, and Morgan Stanley analysts have warned that the Robotaxi may not be profitable for several years.
Edited by Jeffrey