Tesla Inc shares are trading higher, adding to strong gains from recent sessions. Here’s a breakdown of what’s driving the surge:
Key Developments
- The State Board of Administration of Florida Retirement System, which oversees the FRS Trust Fund and holds over $1 billion in Tesla stock, has endorsed CEO Elon Musk’s latest pay package.
- The compensation structure is characterized as a “bold, performance-driven incentive structure” that provides no guaranteed pay for Musk.
- If Tesla achieves all metrics outlined in the plan, investors would benefit from incremental value creation of $7.5 trillion, with shareholder gains outweighing any dilution from the equity award.
Reactions to the Compensation Package
The compensation package has drawn mixed reactions, with:
- ARK Invest CEO Cathie Wood backing the award and forecasting a decisive shareholder vote in favor during the November 6 meeting.
- CNBC’s Jim Cramer supporting the package.
- Gerber Kawasaki co-founder Ross Gerber criticizing it as “insanity”.
Autonomous Driving Developments
Morgan Stanley analyst Adam Jonas has declared that Tesla has “solved” autonomous driving sufficiently to “pull the safety driver at scale in major metros”. Jonas suggests that the only factor preventing Tesla from removing onboard safety operators from its Robotaxis is the company’s “own abundance of caution”.
Projected Growth
Jonas projects Tesla’s global active vehicle fleet will reach 8 million by year-end 2025, potentially generating approximately $300 million in quarterly FSD revenue, or $1.2 billion annualized.
Political Developments
President Donald Trump has indicated that his relationship with Musk is back on track after a public falling-out earlier this year, which may be adding to the bullish momentum this week.
Stock Performance
Tesla shares are up 2.09% at $461.85, trading 5% below its 52-week high. The stock is currently trading 15.9% above its 50-day moving average.
Conclusion
Tesla’s stock surge can be attributed to a combination of factors, including the endorsement of Elon Musk’s pay package, developments in autonomous driving, and improved relations with President Trump. As the company continues to grow and expand its offerings, investors will be watching closely to see how these factors impact the stock’s performance.