In an opinion piece published on Monday, Jeff Yass, the Managing Director of Susquehanna International Group, which holds a significant stake in Tesla (NASDAQ:TSLA), voiced his support for Elon Musk's right to countersue in light of a recent court ruling. Yass's firm owns 3.94 million shares of Tesla, valued at over $1.5 billion.
Yass's commentary responds to a Delaware Court of Chancery decision where Judge Kathaleen McCormick (NYSE:MKC) used a "fairness standard" to rule on a corporate transaction. This standard, he argues, could allow a single investor to challenge a transaction that was approved by the majority of shareholders. Yass believes that based on this precedent, Musk should have the option to countersue regarding his 2018 compensation plan.
At the time the compensation deal was made, option traders estimated the value of Musk's pay package at approximately $3 billion. Following the announcement of the deal, Tesla's stock experienced a slight increase.
According to Yass, the Tesla board did not fairly compensate Musk, taking advantage of his optimistic view of the company's future. Since the agreement in 2018, Tesla's stock has seen a staggering increase of 1,700%, which Yass describes as a highly unexpected outcome.
Yass concludes by stating that Musk is at least entitled to the compensation he was promised and potentially more, based on the judge's reasoning. He emphasizes that it is unjust to capitalize on Musk's optimism.
In other recent news, Tesla has seen significant developments, with Morgan Stanley (NYSE:MS) maintaining an Overweight rating on the electric vehicle manufacturer's shares and raising its price target to $400.00. This adjustment reflects policy changes that could affect U.S. electric vehicle sales and the importance of maintaining leadership in autonomous vehicle technology. Tesla's strong market position is reflected in its impressive $97.15 billion revenue and $1.25 trillion market capitalization.
Meanwhile, CFRA has also raised Tesla's price target to $450 due to the company's promising outlook in autonomous driving technology. Tesla's recent sales performance has been record-breaking, with global passenger xEV sales hitting an all-time high of 1.76 million units in October.
In terms of analyst notes, Guggenheim maintained a Sell rating on Tesla's stock, citing risks to its future growth targets, while BofA Securities maintained a Buy rating, highlighting the potential of Tesla's Optimus robot to drive the next wave of automation.
In other developments, Elon Musk's artificial intelligence venture, xAI, secured $6 billion in its latest funding round and announced plans to expand its "Colossus" supercomputer facility. The expansion aims to increase its capacity ten-fold to over one million Graphics Processing Units (GPUs), potentially transforming Memphis into a global hub for artificial intelligence. These are some of the recent developments surrounding Tesla and xAI.
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