A landmark legal battle over what was once the largest executive compensation package in corporate history has reached a decisive conclusion. The Delaware Supreme Court has ruled in favor of CEO Elon Musk, reinstating a stock option award currently valued at approximately $139 billion. This judicial shift consolidates Musk’s authority within the electric vehicle maker but arrives as market analysts express caution regarding the company’s near-term operational performance and stretched valuation.
Court Ruling Reshapes Ownership and Fortune
The court’s decision overturns a 2024 ruling, effectively restoring the original 2018 compensation agreement. The implications for Tesla’s ownership structure are significant. By regaining options on roughly 304 million shares, Musk is positioned to increase his stake in the company from around 12.4% to 18.1%.
This resolution ends prolonged uncertainty surrounding Musk’s long-term commitment to Tesla. It follows a separate shareholder vote in November that approved a new compensation plan. Combined, these developments fortify the CEO’s influence to an unprecedented degree. Current calculations suggest this legal victory will propel Musk to become the first individual with a net worth exceeding $700 billion.
Operational Metrics Contrast with Legal Optimism
Despite this legal triumph, attention is returning to business fundamentals. Analysts at Deutsche Bank project fourth-quarter deliveries near 405,000 vehicles, a figure that would fall below consensus estimates. Notably, the bank still raised its price target for Tesla shares, citing long-term potential. Similarly, Truist Financial increased its target but maintained a “Hold” rating, advising caution due to the stock’s elevated valuation.
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Technical indicators echo this wariness. With a Relative Strength Index (RSI) reading of 73.7, the stock is technically in overbought territory. Furthermore, trading at €410.85, the share price lingers just below its 52-week high of €420.65, leaving minimal room for disappointing news.
Advances and Setbacks in Autonomous Driving
Beyond financials, Tesla continues to push forward with its robotaxi ambitions. In Austin, Texas, the company is testing vehicles without a safety driver—a milestone relying solely on camera-based navigation. This progress contrasts with competitors like Waymo, which have recently grappled with technical failures.
Concurrently, regulatory challenges are mounting. A California judge recently deemed Tesla’s “Autopilot” and “Full Self-Driving” nomenclature misleading. This classification could force a costly rebranding in the critical U.S. market to avoid potential sales restrictions.
While the reinstated compensation package brings clarity to Tesla’s leadership question, the equity’s valuation remains extraordinarily ambitious. With anticipated delivery numbers pointing to a flattening demand curve, upcoming quarterly results must demonstrate whether the promise of autonomous driving can justify the current market capitalization of $1.6 trillion.
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