June shareholder vote could drive material Tesla volatility, says Morgan Stanley

Morgan Stanley sees Tesla’s upcoming shareholder vote “having significance to the long-term strategic direction of the company” and expects the event could “drive material volatility in the stock.” On June 13, shareholders will vote on two main topics, namely redomiciling Tesla’s headquarters from Delaware to its “business home” of Texas and a roughly $50B executive pay package for Elon Musk, which was voided by a Delaware judge in January, the analyst noted. From its talks with investors, the firm finds “a surprisingly little amount of attention being paid to its significance to the performance of the stock,” but it recommends “Tesla watchers keep June 13th highlighted on the calendar” as Elon Musk has expressed his concern and discomfort with moving Tesla further into the field of AI without having around 25% voting in the event this “powerful technology goes awry.” While an approval of the CEO’s 2018 pay package would not, by itself, give Elon Musk a 25% voting block, “we view the outcome as significant,” added the analyst, who keeps an Overweight rating and $310 price target on Tesla shares.