Elon Musk, the charismatic CEO of Tesla (NASDAQ:TSLA), recently hinted that his sizable stock grant is likely to receive necessary approvals at the shareholder’s meeting held today. This news appeared to spark enthusiasm among investors, as Tesla’s stock price saw an impressive 6.5% growth following the announcement.
Musk made the hint public via a post on his privately-owned social networking site X, formerly known as Twitter. In the post, the CEO shared votes streaming in favor of the resolutions over the course of the last two days.
Prior to the declaration, shares were being traded around $170 each on June 12, but have since ascended to nearly $189 each before the opening bell this morning. Such upward traction has added an astounding $36 billion to Tesla’s overall market capitalization.
Alongside the potential approval of the stock grant, Musk expressed his optimism that the proposed transfer of the company’s base from Delaware to Texas would be sanctioned. The Lone Star State has been modifying its laws to attract business headquarters over recent years.
Musk had previously threatened to leave Tesla if the resolutions weren’t approved. The controversial stock grant was originally offered as an option in 2018, tied to the stock’s performance. Worth noting is the staggering increase of Tesla shares, which have risen over 1,100% in the last five years.
However, in January, a Delaware Chancery Court nullified the grant, terming it as excessive. Since then, Musk has been vehemently campaigning to have it reinstated, while also pushing back against the contingency fee of 10% sought by the opposing legal team from the disputed amount.
Reportedly, the value of Musk’s grant vacillates between $47 billion and $56 billion, with the final value resting completely on Tesla’s stock price. As a result, any depreciation in the stock price will negatively affect the worth of the grant and vice versa.
The recent surge in stock price appears to validate that investors are supportive of Musk’s leadership at Tesla and desire him to stay at the helm. However, despite these overnight gains, Tesla stock is still down 28% from its initiation point this year.
Interestingly, irrespective of the voter decision, Musk’s position as the world’s wealthiest individual, with an estimated net worth of $209 billion according to Forbes, won’t be threatened. This places him $5 billion ahead of Amazon (NASDAQ:AMZN) founder Jeff Bezos.
Only time can determine whether this stock grant proposition will prove beneficial for Tesla shareholders or not. Regardless, the battle over the grant has undeniably been of importance to Musk.
As of the moment of writing this piece, the author, Dana Blankenhorn, holds a long position in Amazon. The writer’s opinions as expressed in this article are only their own.
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