Tesla Shares Drop 6% After Elon Musk’s $1T Bonus Approval

  • Elon Musk’s $1 trillion compensation plan was approved at the recent Tesla shareholder meeting.
  • Tesla shares have declined sharply since the approval, with a 6% drop in one day and a 10% decline over the week.
  • The pay package grants Musk 12 portions of shares over ten years if Tesla meets specific goals, increasing his voting power.
  • Analysts remain optimistic about Tesla’s autonomous and Ai technology future despite recent stock declines.
  • Wall Street holds a mixed stance on Tesla stock with a consensus Hold rating and an average price target suggesting slight downside risk.

Elon Musk received approval last week for a $1 trillion compensation plan during a Tesla shareholder meeting. This package awards Musk 12 portions of shares over the next ten years if Tesla meets particular milestones. It also increases his voting control within the company.

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Since the announcement, Tesla (TSLA) shares have fallen sharply. The stock closed Thursday trading at just above $401, marking a 6% drop in 24 hours, its largest single-day decline since the previous summer. Tesla’s stock has also declined about 10% over the past week and nearly 8% during the last 30 days.

Despite recent declines, analysts like Wedbush’s Dan Ives remain bullish on Tesla’s long-term outlook. Speaking at the Yahoo Finance Invest event, Ives described the pay plan approval as a “bright green light” for Tesla’s Artificial Intelligence (AI) and autonomous technology development. He predicts Tesla will control roughly 80% of the autonomous vehicle sector within the next decade and set a Street-high $600 price target.

On Wall Street, Tesla holds a Hold consensus rating, based on 14 Buy, 10 Hold, and 10 Sell ratings issued over the last three months. After a 38.38% increase in share price over the past year, the average analyst price target stands at $382.54, implying a potential downside risk of about 4.6%. At the time of reporting, Tesla stock trades near its 52-week high and remains above its 200-day simple moving average.

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