It’s all roses and rainbows today in Austin, one Tesla analyst says of Musk’s mega payday vote

It’s all roses and rainbows today in Austin, one Tesla analyst says of Musk’s mega payday vote
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A Tesla car charging up at a Tesla Supercharger.
A Tesla car charging up at a Tesla Supercharger.

  • Tesla’s shareholders approved Elon Musk’s $55 billion pay package and the company’s move to Texas.
  • Wedbush analyst Dan Ives called the result a “pop the champagne moment” for Tesla investors.
  • Ives added that if the proposal “went south,” some “bad things” could have happened.

At least one analyst is extremely optimistic about how Tesla’s shareholders voted.

Wedbush Securities analyst Dan Ives called Tesla chief Elon Musk’s victory a “pop the champagne moment” for investors in a note on Thursday. Ives predicted the result of the much-hyped vote would remove a $20 to $25 overhang on the EV maker’s stock.

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The Tesla vote focused on two main issues: the company’s move from Delaware to Texas, and approval of Musk’s $55 billion pay package, which was largely seen as a referendum on his leadership.

“If this proposal went south a lot of bad things and scenarios could have happened including Musk beginning a path to not being CEO of Tesla,” Ives, a Tesla bull, wrote in the note. “Instead it’s roses and rainbows today in Austin.”

Ives’ comments on the risk that Musk would leave Tesla came amid growing concerns that if the pay package had been thrown out, Musk might slowly lose interest in the EV giant and divert attention to his other ventures.

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The Tesla CEO in January also threatened to slash AI development if he doesn’t have control over at least 25% of the votes.

Ives, for his part, rated the stock at “outperform” with a $275 price target, an upside of 45% from current levels. Analyst consensus marks the stock’s price at about $173.

Despite his positive comments, Ives also talked about a headwind for Tesla — slowing demand.

In April, amid choppy demand for EVs in general and fierce competition from Chinese rivals, Tesla reported its lowest quarterly deliveries since 2022, and its biggest-ever miss compared to analyst expectations.

In the same month, it slashed prices of existing cars and announced the production of cheaper cars to stir demand.

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“We believe the setup in the coming weeks is more negative with delivery downside risks,” analyst Ronald Jewsikow from Guggenheim wrote in a separate note on Thursday.

Read the original article on Business Insider

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