Tesla's stock future: Insights from shareholders and Wall Street experts

Tesla Shareholders Approve Musk's Pay Package Amid Mixed Reactions

Despite a vote in favor of reinstating Elon Musk's substantial compensation package, numerous Tesla investors express lingering doubts. Shareholders opted to back the $56 billion deal, albeit many did so reluctantly. Early investor Ibrahim AlHusseini noted the psychological pressures Musk leveraged, emphasizing the fear of loss that drove the decision. While AlHusseini acknowledged Musk’s accomplishments, he predicted that Tesla’s stock would likely suffer due to expected underperformance in upcoming quarterly earnings.

The approval saw 77% of votes in favor, with 1.76 billion shares backing Musk's package, and 528.9 million against it. The package, consisting of stock options, now holds a diminished value of about $46 billion due to a drop in Tesla’s market cap. The legal wranglings surrounding the package continue, with past concerns about the fairness of negotiations still unresolved. The ultimate decision remains tied up in higher court deliberations.

Meanwhile, New York City Comptroller Brad Lander, a vocal opponent, deemed the approval a poor choice and urged Musk to focus on Tesla's growth strategies rather than diversions like public feuds and unrelated projects. Lander noted the company's resilient foundation but cautioned against the excessive reward.

Vanguard, Tesla’s largest institutional shareholder, was critical in passing the deal. However, this move did not sit well with everyone, including Ross Gerber, a longtime investor who switched his vote from yes in 2018 to no this time around, citing Musk's recent poor performance.

Reincorporation and Future Prospects

Shareholders also approved a proposal to move Tesla’s incorporation from Delaware to Texas, a shift Musk encouraged post the voiding of his pay deal by a judge. The decision drew criticism from Comptroller Lander, who saw it as a distraction and questioned the impact on Tesla's corporate governance.

Despite concerns, analysts see the vote as a positive signal for Tesla’s future. Canaccord Genuity’s George Gianarikas views it as a reaffirmation of Musk's essential role, especially with the company's advancements in autonomous driving. Wedbush's Dan Ives described the event as a significant win, noting it removes substantial uncertainty from Tesla’s stock. Ives envisions substantial growth, with Tesla potentially surpassing a $1 trillion valuation by 2025.

Dissenting Views and Caution

However, not all are optimistic. Dave Harden of Summit Global cautioned against immediate investment in Tesla, pointing out the high risk due to potential shareholder dilution and the company’s unproven track record in AI and robotics. Harden advised a wait-and-see approach, suggesting current shareholders might consider selling their shares.

As Tesla navigates through these complex dynamics, the coming months will be crucial in determining whether Musk's leadership and the controversial pay package will translate into sustained growth and investor confidence.