Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[SOULPEDL]

My kids have indicated that I should diversify some, lol. AMD has my interest.

The AI servers (H100/200) are like Tesla products - demand is endless. Others will (and must) make AI servers (monopoly). Sure, NVidia also has some cool proprietary software, and is in gaming which makes them the clear winner for now, just over priced when I look at what's coming... this year.

But then I saw this with AMD: Is this correct... PE is 308?

Tesla's cheap when compared... I could buy the dip instead.

 

[SmokyPeat]

Yikes, TSLA is only up 2% on the 1 year chart now. What a difference a month makes.

 

[mongo]

if the report that Tesla is installing redundant CATL machinery in Nevada is correct, and if it is for lithium iron cells, could this mean Tesla may be planning to make some Model 3s that qualify for the $7500 credit? Perhaps even if it is for regular cells.

Reports I've seen call out use in Megapacks.

 

[Featsbeyond50]

FWIW that was not true for many years... in fact DOMA in the mid-90s specifically called out that no state need recognize the legal validity of same sex marriages in other states. This wouldn't be fully corrected until Obergefell v. Hodges. in 2015 where SCOTUS required all states to recognize such marriages regardless of what state they happened in.

Even today try seeing how valid your out-of-state conceal carry permit is in say California and you'll be in for an unpleasant surprise.





How would those lawyers be collecting hundreds of millions?

This isn't a class action where Tesla has to pay the winning side some huge cash amount the lawyers get a big chunk of.

I'm not even pretending to be a lawyer on the internet, but I know they're not doing it for free. They typically get a percentage of the judgement. What the judgement is is a big question mark for me. Is it of the 55.6 B, the value at the time the deal was made in 2018, or something else? I don't know but it's going to be a big number and they will get a percentage of it. I think hundreds of millions is likely.

Someone who has expertise or knowledge in this area, please jump in here and enlighten us.

 

[bpjod]

I'm not even pretending to be a lawyer on the internet, but I know they're not doing it for free. They typically get a percentage of the judgement. What the judgement is is a big question mark for me. Is it of the 55.6 B, the value at the time the deal was made in 2018, or something else? I don't know but it's going to be a big number and they will get a percentage of it. I think hundreds of millions is likely.

Someone who has expertise or knowledge in this area, please jump in here and enlighten us.

My hope is, it’s a percentage of all the monies the plaintiff lost holding those 9 shares since 2018.

 

[bubb]

Can we please keep the Delaware court judgment discussion focused on substantive consequences for TSLA here, rather than conspiracy theories and character attacks on a judge? There are plenty of other places on the internet for this kind of off-topic venting e.g. reply @elonmusk on X.

 

[kbeckley]

https://twitter.com/x/status/1752922071229722990

I have no idea if it is good idea to move the incorporation to Texas but if Elon had put anyplace (eg, Hawaii, Albania, Mars) in this question it would have gotten more than 50% yes. You know, 'for the lols'. Should he not be asking shareholders and not the general public? Again moving to Texas might be a great idea but this seems a ridiculous way to make the decision (I actually think the decision was made before the question was asked).

 

[Featsbeyond50]

My hope is, it’s a percentage of all the monies the plaintiff lost holding those 9 shares since 2018.

In our dreams.

 

[MP3Mike]

Should he not be asking shareholders and not the general public?

Did you miss that he said that Tesla is going to send it to a shareholder vote? So, they are going to ask the shareholders. And I assume the proxy materials will have some information about why we would want to approve it.

 

[2daMoon]

I have no idea if it is good idea to move the incorporation to Texas but if Elon had put anyplace (eg, Hawaii, Albania, Mars) in this question it would have gotten more than 50% yes. You know, 'for the lols'. Should he not be asking shareholders and not the general public? Again moving to Texas might be a great idea but this seems a ridiculous way to make the decision (I actually think the decision was made before the question was asked).

These polls seem to be Elon's method of subtlety.

Rather than "Funding Secured" he might now write, Poll: Should I secure funding - Yes or No?

I take his polls as announcements of what he already intends to do, rather than him asking for guidance from the general public. Only styled to prevent anyone using it against him or Tesla later.

 

[Knightshade]

I'm not even pretending to be a lawyer on the internet, but I know they're not doing it for free. They typically get a percentage of the judgement. What the judgement is is a big question mark for me.

There is no monetary judgement for the plaintiffs.

This is not a civil lawsuit for a cash award.

I'm sure the lawyers will be paid their hourly rates for the hours the case took them to develop and try- and they can ask the court to make someone pay that- but there's no cash judgement to get a set % of here.

Is it of the 55.6 B, the value at the time the deal was made in 2018, or something else?

55.6b is (roughly) the value of the options he would have been able to exercise from the compensation package. I think it was like 2.6B based on stock price when original deal was voting in though.

I don't know but it's going to be a big number and they will get a percentage of it.

No, they will not. The decision was about if Elon gets the compensation in the deal or if nobody does.

The ONLY entity to directly benefit significantly from this judgement, financially, is Tesla. They get back the value of the options they had otherwise issued to Elon and already put on their books as a cost.

As I say lawyers can ask for fees of course.

 

[Featsbeyond50]

There is no monetary judgement for the plaintiffs.

This is not a civil lawsuit for a cash award.

The winning side will get $0.00 from Elon or Tesla by Elons compensation deal being voided.

I'm sure the lawyers will be paid their hourly rates for the hours the case took them to develop and try- but that's it.







55.6b is (roughly) the value of the options he would have been able to exercise from the compensation package.





No, they will not. You are completely misunderstanding the case I'm afraid. The decision was about if Elon gets the compensation in the deal or if nobody does.

The ONLY entity to directly benefit significantly from this judgement, financially, is Tesla. They get back the value of the options they had otherwise issued to Elon and already put on their books as a cost.

I'll be shocked if you are right. I'm going to call it right now and say you are dead wrong.
What you post suggests that 9-share would have to pay the hourly rate of the attorneys. That's not happening unless he has some behind the scenes backing.

 

[Knightshade]

I'll be shocked if you are right. I'm going to call it right now and say you are dead wrong.

Call it based on what?

Like- it literally is not a cash judgement where they'd take some % of the payout to their client.

There certainly HAVE been such cases-- for example In 2023, a Delaware judge awarded 267M of a 1B settlement with Dell over its VMware merger

That was lawyers getting 1/3rd of the settlement payment. But there ISN'T a settlement payout here.

The lawyers can still ASK for compensation from the court, and I fully expect they WILL- but since nobody is paying anybody a single penny in settlement I'm not sure how the court could afix any number beyond actual legal fees (which could well be millions, though not hundreds of them) or where that $ would even be asking to come from since 0 cash is changing hands from the case, just unexercised options being revoked.

What you post suggests that 9-share would have to pay the hourly rate of the attorneys. That's not happening unless he has some behind the scenes backing.

it's entirely possible he has some behind the scenes backing.

But the judgement voids Elons compensation deal. It does not somehow redistribute that compensation anywhere, at all, except back to Tesla since the deal is voided.

 

[growler23]

Why is no one talking about how this exposes incredible failure of the Board back in 2018?
Elon's performance did not fail him. He hit the marks. Tesla employees came through as well.
Instead, looks to me like the Board's total lack of basic record keeping, basic due diligence (I mean, come on, even I know you should run a comparative report against other CEO's salaries: even if you then say "our guy is worth 1000x that", if you document the fact that you ran the report, document your reasoning, then you cover your butt and the judge lets it stand). Good Lord, it does sound like they dropped the ball in a truly classic "Leon Lett it go!" moment (bonus points for remembering that one) ... a "moment" that reportedly spanned months and multiple meetings.
YMMV but IMO the fault for this ruling rests massively on the Board as constituted in those years.

However, this ruling does not say the Board can't pay Elon. It says they have to make a new deal. The Board will pay Elon handsomely (they would be idiots at the least not to do so), they will consider the needs of shareholders, and (mirabile visu) document how they did so in their process this time around to fireproof it.

A truly wild conspiracy theorist would say this was all multiyear 4D Elon chess: a disruption in order to get the impetus to move the corporation itself to Texas, to get him a clearer opportunity for 25% voting power, and to protect us long-suffering HODLers from the 2028 options execution tsunami that Dodger has documented for us so well that was a feature of the now defunct 2018 plan. And the kicker: his hands are clean; "The judge made me do it".
Glad I am personally nowhere near that wild in my thinking though.

 

[Drumheller]

I'll be shocked if you are right. I'm going to call it right now and say you are dead wrong.
What you post suggests that 9-share would have to pay the hourly rate of the attorneys. That's not happening unless he has some behind the scenes backing.

Of course he has backing. But stating the logically obvious now gets people labeled as "conspiracy theorists " by the people that believe everything the media tells them to think.

 

[EQC_]

I have no idea if it is good idea to move the incorporation to Texas but if Elon had put anyplace (eg, Hawaii, Albania, Mars) in this question it would have gotten more than 50% yes. You know, 'for the lols'. Should he not be asking shareholders and not the general public? Again moving to Texas might be a great idea but this seems a ridiculous way to make the decision (I actually think the decision was made before the question was asked).

The "decision" from the X poll was to actually ask the shareholders...

Sortof a publicity stunt in a way. It doesn't make sense for the general non-shareholding public to be making decisions for a business for the exact reason you state (the lols), and that's not what's happening here. But, the poll can happen more quickly and get some press...

 

[MD70]

Why is no one talking about how this exposes incredible failure of the Board back in 2018?
Elon's performance did not fail him. He hit the marks. Tesla employees came through as well.
Instead, looks to me like the Board's total lack of basic record keeping, basic due diligence

What the information provided for this ruling confirms is that aspects of the company are run on Elons whims and the board is composed of yes men and women.

That has some advantages such as being able to make decisions (for the better or worse) quickly and may be fine for a private company but for a public company it is not.

Even if they are going through the motions the board needs to take certain steps when making important decisions.

It’s not difficult to do, see the so many examples of CEOs who f up companies but walk away with huge payouts.

Moving to another jurisdiction (Even if it is more friendly to business) is not going to solve this problem and unfortunately I foresee future problems if this issue isn’t resolved.

 

[2daMoon]

Why is no one talking about how this exposes incredible failure of the Board back in 2018?
Elon's performance did not fail him. He hit the marks. Tesla employees came through as well.
Instead, looks to me like the Board's total lack of basic record keeping, basic due diligence (I mean, come on, even I know you should run a comparative report against other CEO's salaries: even if you then say "our guy is worth 1000x that", if you document the fact that you ran the report, document your reasoning, then you cover your butt and the judge lets it stand). Good Lord, it does sound like they dropped the ball in a truly classic "Leon Lett it go!" moment (bonus points for remembering that one) ... a "moment" that reportedly spanned months and multiple meetings.
YMMV but IMO the fault for this ruling rests massively on the Board as constituted in those years.

What if they did provide adequate documentation and the decision was flawed, but, coming up short isn't tragic, as it works out better to have the Do-Over?

However, this ruling does not say the Board can't pay Elon. It says they have to make a new deal. The Board will pay Elon handsomely (they would be idiots at the least not to do so), they will consider the needs of shareholders, and (mirabile visu) document how they did so in their process this time around to fireproof it.

Exactly

A truly wild conspiracy theorist would say this was all multiyear 4D Elon chess: a disruption in order to get the impetus to move the corporation itself to Texas, to get him a clearer opportunity for 25% voting power, and to protect us long-suffering HODLers from the 2028 options execution tsunami that Dodger has documented for us so well that was a feature of the now defunct 2018 plan. And the kicker: his hands are clean; "The judge made me do it".
Glad I am personally nowhere near that wild in my thinking though.

They always could have moved the corporation. There would be no need for all the drama in order to do that.

The rest of the above could make a reasonable argument towards how the outcome offers advantages that would exceed the costs by enough to be worth the trouble.

 

[scaesare]

These polls seem to be Elon's method of subtlety.

Rather that "Funding Secured" he might now write, Poll: Should I secure funding - Yes or No?

I take his polls as announcements of what he already intends to do, rather than him asking for guidance from the general public. Only styled to prevent anyone using it against him or Tesla later.

And perhaps a sanity/gut-check?

 

[EQC_]

Rough calculation: The media is calling Elon's cancelled compensation a $55 Billion package. But, if he had to pay to exercise those options, and then sell shares to cover the taxes, seems like he'd actually end up with somewhere around $25 billion in value while potentially tanking the stock due to the selling for taxes...so at least temporarily, potentially considerably less than $25 billion plus a lot of unhappy shareholders. Is that about right?

Dumb observation: It is interesting to me that Tesla's cash-on-hand is over $29 billion now and growing..

I wonder if there is some clever way, as that cash balance grows and concern over the economy subsides, to use that cash balance to do some round-about things to benefit Tesla and TSLA and compensate Elon, while seeking to minimize induced stock volatility and potentialy taxes due all around. Paying Elon directly such a huge sum seems unwise. If a new compensation package still includes options, I could imagine coupling Elon's tax-selling with a similarly-sized-and-timed buy-back, but that also seems simplistic and probably problematic for some reason I don't realize. There's gotta be a real/good solution though...