Tesla shares dropped on Friday, easing by 2 percent to trade at $178.78, hours after the company’s shareholders approved a historic $56 billion payout to CEO Elon Musk. The compensation package has, however, declined to about $45 billion, in light of the company’s recent reduced performance. Besides the pay deal, the shareholders also approved the relocation of the company’s legal headquarters to Texas.
While news of the payout approval clears a crucial hurdle for the company, it could trigger a new wave of controversy at a time when it is struggling to replicate its 2023 sales figures. Despite the losses, however, TSLA is still on course to end the week on a green candlestick, with its weekly gains standing at 0.75 percent as of this writing.
There has been widespread speculation that a refusal by the shareholders to approve the pay package could have resulted in Musk giving less of his time to Tesla. Musk is involved in other high-profile companies such as social media platform, X, SpaceX, Starlink, Neuralink and his new AI project, Xai.
Even though it is difficult to extrapolate the exact extent of such a move, there’s no doubt that it could have impacted the company’s performance in the long term. The fact that 72% of shareholders voted in favour of the pay package signals the confidence they have in Musk’s leadership. To his credit, Musk has led the company to a 1,100 percent growth since 2018-a more-than-impressive growth by all measures.
That said, Tesla stock price is down by about 30 percent in 2024, and many investors are counting on its Robotaxi unveiling to potentially fuel a recovery. However, that won’t happen until August 8. In the intervening period, Musk’s pay package and Tesla’s monthly sales figures will inject volatility into the stock price.
The momentum on Tesla share price favours control by the sellers. The downward momentum is likely to continue if resistance remains at the 178.59 pivot mark. That could see the first support established at 176.34, below which the momentum could push TSLA price lower to test 174.73. Alternatively, the buyers could take control of the market if the share price breaks above 178.59. The buyers are likely to encounter the first resistance at 180.75, and a break above that mark will invalidate the downward narrative. In addition, it could strengthen the upside momentum to test 182.67.
This post was last modified on Jun 14, 2024, 19:59 BST 19:59