Tesla relief after majority of shareholders backed Musk

Tesla (NASDAQ:TSLA) shares traded on the back foot, down 1.75% to $179.28, on a quieter day after last night's AGM excitement.

At the meeting, it was confirmed that shareholders voted in favour of reinstating Elon Musk’s $56 billion pay package – with 72% of votes backing the Tesla CEO.

At the same time, shareholders approved Tesla’s proposed relocation from Delaware to Texas.

“… hot damn, I love you guys,” was the message from Musk at the AGM, whilst Tesla chair Robyn Denholm described it as “a matter of fundamental fairness and respect”.

“No other shareholder base understands the company as you do. You are the owners of the company,” she told shareholders.

Daniel Ives, analyst at West Coast stockbroker Wedbush, echoed these comments as he reacted to the vote and looked ahead to the future for Tesla.

“Tesla is Musk and Musk is Tesla....shareholders spoke loudly,” Ives said in a note.

He added: “In a nutshell, if this proposal went south a lot of bad things and scenarios could have happened including Musk beginning a path to not being CEO of Tesla.

“Instead it's roses and rainbows today in Austin although demand challenges remain and this is pivotal period for Tesla and Musk to navigate this turbulent period to see improved demand, FSD success, and new model rollouts over the coming year.”

According to Ives, the resolution removes a $20-$25 overhang on the stock, which the broker reckons has weighed on shares.

Wedbush, which has an ‘outperform’ rating for Tesla, now expects Musk to be incentivised to  “resolve the AI threat saga the last few months”, and also focus on the advancement toward ‘full self-driving’ (FSD).

“Our bull case is now $350 heading into the next 12 to 18 months as we believe the next chapter in the Tesla growth story around autonomous and FSD is now on the near-term horizon set to take Tesla's valuation to north of $1 trillion in 2025 in our view.”