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Tesla (NASDAQ:TSLA) pushed higher in early trading on Thursday after Elon Musk tipped off the results of shareholder votes on key proposals.
Wedbush Securities Dan Ives said the approval by Tesla (TSLA) shareholders of Elon Musk’s 2018 compensation package and the incorporation of the company in Texas removes a $20 to $25 overhang on the stock. An official from Tesla (TSLA) on the voting is expected later in the day.
Ives and his team believe an overwhelming retail presence voting in favor of both proposals was key to the approval, despite some large shareholders voting against. “In addition, based on all of our discussions over the past month, large shareholders at the end of the day knew that voting no would risk Musk potentially eventually leaving as CEO and the risk far overweighted the reward in voting no on this proposal despite some obvious frustration with Musk,” he added.
Looking ahead to the meeting later in the day, Ives said to expect Musk to address keeping AI initiatives under the hood of Tesla, despite some of his recent threats to the contrary. He also thinks the Tesla (TSLA) board will look to get Musk to an incentive-driven 25% ownership level of Tesla (TSLA) that should resolve this AI threat saga of the last few months. During the Q&A at the shareholder meeting, Musk is seen weighing in on his commitment to stay as CEO for the next three to five years and addressing issues such as the $30K mass-market vehicle, autonomous initiatives, the AI business, and teasers about the robotaxi event. All of those topics have the potential to be positive or negative catalysts.
Shares of Tesla (TSLA) ripped a 6.79% gain in premarket trading on Thursday. Rivian Automotive (RIVN) and Lucid Group (LCID) were also both up more than 1% in the early session. Elon Musk’s comments later in the day could be relevant to shareholders of companies such as General Motors (GM), Ford (F), Toyota Motor (TM), Nissan (OTCPK:NSANY), NIO (NIO), Li Auto (LI), XPeng (XPEV), and Honda Motor (HMC) as they assess the automobile sector backdrop.
