Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.

$Tesla (TSLA.US)$Investors voted on Elon Musk's 2018 exorbitant compensation plan and proposal to relocate the headquarters ahead of the annual shareholder meeting on Thursday.

Investors have the right to speak on both proposals, but the salary proposal is not legally binding. At a time when Tesla's stock price has recently fallen sharply, people generally consider this to be a referendum on Musk's leadership abilities.

In January of this year, Judge Kathaleen St. J. McCormick of Delaware rejected Musk's $56 billion salary plan. The judge pointed out that this was the highest compensation that executives of a US company had received. The plan had conflicts of interest and other issues. After that, Musk pushed to move Tesla's headquarters from Delaware to Texas.

Musk posted on X platform on Wednesday night that these two critical proposals are currently being passed with a "significant advantage".

The following issues are worth investor attention:

1. If Tesla shareholders approve the restarted plan, will Musk be able to get paid?

Not entirely. Shareholder voting is mainly for confidence-the board of directors takes this opportunity to show investors still want to give Musk generous returns. This has no direct impact on the legal disputes surrounding the 2018 compensation plan. The judge can take note of the voting results or ignore them. The same is true of the Delaware Supreme Court, which will hear any appeals.

The Delaware Supreme Court may overturn McCormick's ruling and clear the way for Musk's salary plan, although this would be a surprising result. Charles Elson, a retired professor from the University of Delaware and an expert in corporate governance, said that if this is the case, the legal obstacles to the compensation plan will be eliminated regardless of the current shareholder voting results.

According to the Bloomberg Billionaires Index, as Tesla's stock price falls, the value of Musk's stock options rewards is also declining, from about $56 billion when the company achieved a series of milestones to the current $46.8 billion.

2. What will happen next in the Delaware Wars?

McCormick will listen to arguments on July 8th and discuss whether the lawyers of Tesla shareholders who successfully challenged Musk's compensation should receive more than $500 million in legal fees. Lawyers ask to receive fees in the form of Tesla stock. Court documents show that individual investors opposed to this request sent McCormick more than 1,300 letters and more than 180 emails. Once McCormick makes a decision on the fees, she will make a final ruling on the case. Then Musk has 30 days to appeal to the Delaware Supreme Court.

3. If shareholders approve the plan to move the headquarters to Texas, when will the move start?

Tesla stated in a proxy statement that it will be completed "as soon as possible" after the annual shareholder meeting. Assuming Tesla's lawyers have prepared the necessary documents before the vote, the process of moving the company's legal headquarters out of Delaware may start quickly. Once the required documents are submitted to the Texas Secretary of State, the state can process and approve the relocation within as little as 24 hours or as long as 5 business days.

4. Once the relocation is completed, can the Tesla Board of Directors restore Musk's compensation plan?

Not entirely. Transferring Tesla's registered location to Texas means that the board of directors must start considering Musk's compensation from scratch. Elson, an expert in corporate governance, said that Tesla cannot simply approve the same plan as in 2018, because the Texas court is legally obligated to abide by the Delaware court’s ruling. The board of directors must make significant changes to the plan-for example, ensuring that directors with conflicts of interest do not participate in formulating Musk's compensation plan-rather than "putting a band-aid on it".

By then, shareholders will have to vote again on Musk's compensation. If investors want to challenge it, they will have to file a lawsuit in Texas.

5. Does Texas have a commercial court like Delaware?

Not yet. The state’s commercial court is scheduled to open in September, but Texas officials are currently working to recruit judges with the necessary experience for complex business litigation. The starting salary for Texas commercial court judges is $140,000, while the starting salary for Delaware chancery court judges is nearly $185,000. Therefore, it is unclear how long the new Texas court will take to handle lawsuits challenging Musk's compensation.

6. Why do Musk and Tesla want to move to Texas?

Musk and other directors believe that McCormick's ruling is unfair and hope that the new commercial court in Texas will give them the freedom to restore their compensation plan. Tesla directors believe that since arranging Musk's compensation plan in 2018, Musk has driven a soaring stock price of the electric automaker in recent years, so Musk should receive fair compensation. Elson and others argue that granting stock options exceeding $46 billion in value to one of the richest people in the world is a waste of company assets.

Is anyone questioning the new proxy voting?

This month, a shareholder sued Tesla's directors, alleging they breached their legal duties by agreeing to vote again on Musk's pay and providing misleading disclosures about the vote. He accused Musk of using “strong-arm tactics” to win support from shareholders for proxy proposals but did not explicitly call on McCormick to stop the vote. Instead, he hoped McCormick would declare that more than a simple majority was needed to move the company out of Delaware, contending that directors needed more than 66% of the votes to make such a move legally.

Why did Tesla originally register in Delaware?

Delaware is the center of American business corporations, with over one million registered companies in the state. Nearly 70% of Fortune 500 companies are registered in Delaware, mainly to take advantage of its nearly 100 years of corporate law rulings and the advantage of its balanced court, which can quickly resolve company lawsuits without a jury. Judges in the court, such as McCormick and Travis Laster, are recognized experts in business law.

What is the impact on Tesla's stock price?

After Musk revealed the voting results for the key proposal by shareholders, Tesla rose nearly 7% before the opening bell Thursday.

Wedbush analyst Dan Ives said the approval of Musk's 2018 pay plan and the proposal to move headquarters by Tesla shareholders takes off $20 to $25 of pressure on the stock price. Tesla executives are expected to speak later in the day on the voting.

Ives and his team believe that despite some large shareholders voting against, the majority of individual investors favoring the two proposals were key to their passage. "Additionally, based on all our discussions in the past month, large shareholders ultimately know that a vote against would likely see Musk depart as CEO, and while there is some obvious disappointment with Musk, the risk-reward of voting against was far too great," he added.

Looking ahead to Thursday's annual shareholder meeting, Ives said that despite Musk's recent warnings about the risks of artificial intelligence, he expects Musk to address Tesla's AI project issues. He also believes that the Tesla board will seek to give Musk 25% ownership of Tesla. During the Q&A session at the shareholder meeting, Musk may promise to continue serving as CEO for the next three to five years and may discuss topics such as the $30,000 affordable car, autonomous driving plan, AI business, and robot taxi rental, all of which could serve as positive or negative catalysts for the stock price.

Editor / jayden