Investor's Corner
Tesla board curbs doubts from critics as Elon Musk’s privatization plan starts forming
Tesla stock (NASDAQ:TSLA) is still feeling the aftermath of Elon Musk’s bombshell on Tuesday, when he announced on Twitter that he is considering taking Tesla private. Tesla’s shares were already on a roll prior to Musk’s update, climbing 5% amidst reports that a Saudi Arabian sovereign wealth fund has taken a $2 billion stake in the company earlier this year.
Musk’s announcement was met by a surge in the company’s stock price that resulted in TSLA closing the day up 11% and trading at $379.57 per share, as Tesla’s investors speculated about what could happen to shareholders if the company does go private. The CEO clarified in later tweets that current shareholders of the company would be able to keep their positions even as Tesla becomes private. Before markets closed for the day, Tesla also shared a letter that Musk wrote to employees describing his reasons for his initiative to privatize the company.
It remains to be seen if Tesla would be able to hit its $420 per share target, considering that the company’s stock has a notorious reputation for being incredibly volatile. Nevertheless, Baird Equity Research recently published a note stating that Tesla would hit and likely overshoot the $420 mark. In the note, analysts Ben Kallo and David Katter noted that the company’s shares would probably go even higher as investors demand a steeper premium than $420.
“We think some shareholders may demand a steeper premium than the $420 mark, and we think shares could move higher as shorts cover and investors demand a higher price to go private. Based on our recent conversations with investors, we think shareholders will demand a higher price for a potential go-private transaction, which could cause shares to trade above $420, particularly as shorts may cover positions. We expect the stock to move higher as the story develops,” the analysts wrote.
Elon Musk’s letter to employees about Telsa’s possible privatization mentioned that the company works best when it is focused on executing its goals and pursuing its long-term mission, and in a setup when “there are no perverse incentives for people to try to harm what (the company is) trying to achieve.” Musk, who has never been one to back down from what he believes are attacks against his companies, has found himself at loggerheads with critics multiple times over the past few months — in interactions that sometimes end with Musk and Tesla being worse for wear.
Taking the company private seems to be a move that is at least partly motivated by a desire to get rid of short-sellers and other entities that are betting on Tesla to fail. By making Tesla private, Musk is forcing the company’s staunchest short-sellers and critics to cover their positions. Without short-sellers around, there is far less incentive for Tesla’s critics to keep attacking the company.
One such allegation that could have been avoided easily had the company been private is a recent bear thesis that emerged following Elon Musk’s announcement yesterday. In the aftermath of Tesla’s 11% surge, speculations emerged suggesting that Elon Musk probably did not consult the board of directors about his plans of going private. This particular thesis was curbed promptly by Tesla when it released a statement from six members of the board confirming that they are fully aware of Musk’s privatization efforts for the company.
“Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”
If Tesla pulls off Elon Musk’s initiative to make the company private, it will go down as the biggest buyout in history, and by a wide margin at that. At Elon Musk’s $420 target, Tesla would be privatized for about $70 billion. The current record is held by TXU Corp., which was bought by Kohlberg Kravis Roberts & Co for $31.8 billion back in February 2007.
Tesla shares are up around 22% this year, outperforming the 7% gains of the S&P 500 and the 3.7% gains of the Dow Jones Industrial Average.
As of writing, Tesla shares are trading -1.33% at $374.54 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla enters new stability phase, firm upgrades and adjusts outlook
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
Tesla is entering a new phase of stability in terms of vehicle deliveries, one firm wrote in a new note during the final week of October, backing its position with an upgrade and price target increase on the stock.
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
While most firms are interested in highlighting Tesla’s future growth, which will be catalyzed mostly by the advent of self-driving vehicles, autonomy, and the company’s all-in mentality on AI and robotics, Pozdnyakov is solely focusing on vehicle deliveries.
The analyst wrote in a note to investors that he believes Tesla’s updated vehicle lineup, which includes its new affordable “Standard” trims of the Model 3 and Model Y, is going to stabilize the company’s delivery volumes and return the company to annual growth.
Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings
Tesla launched the new affordable Model 3 and Model Y “Standard” trims on October 7, which introduced two stripped-down, less premium versions of the all-electric sedan and crossover.
They are both priced at under $40,000, with the Model 3 at $37,990 and the Model Y at $39,990, and while these prices may not necessarily be what consumers were expecting, they are well under what Kelley Blue Book said was the average new car transaction price for September, which swelled above $50,000.
Despite the rollout of these two new models, it is interesting to hear that a Wall Street firm would think that Tesla is going to return to more stable delivery figures and potentially enter a new growth phase.
Many Wall Street firms have been more focused on AI, Robotics, and Tesla’s self-driving project, which are the more prevalent things that will drive investor growth over the next few years.
Wedbush’s Dan Ives, for example, tends to focus on the company’s prowess in AI and self-driving. However, he did touch on vehicle deliveries in the coming years in a recent note.
Ives said in a note on October 2:
“While EV demand is expected to fall with the EV tax credit expiration, this was a great bounce-back quarter for TSLA to lay the groundwork for deliveries moving forward, but there is still work to do to gain further ground from a delivery perspective.”
Tesla has some things to figure out before it can truly consider guaranteed stability from a delivery standpoint. Initially, the next two quarters will be a crucial way to determine demand without the $7,500 EV tax credit. It will also begin to figure out if its new affordable models are attractive enough at their current price point to win over consumers.
Investor's Corner
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Bank of America has raised its Tesla (NASDAQ:TSLA) price target by 38% to $471, up from $341 per share.
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Robotaxi and Optimus momentum
Bank of America analyst Federico Merendi noted that the firm’s price target increase reflects Tesla’s growing potential in its Robotaxi and Optimus programs, among other factors. BofA’s updated valuation is based on a sum-of-the-parts (SOTP) model extending through 2040, which shows the Robotaxi platform accounting for 45% of total value. The model also shows Tesla’s humanoid robot Optimus contributing 19%, and Full Self-Driving (FSD) and the Energy segment adding 17% and 6% respectively.
“Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,” the Bank of America analyst noted.
Still a Neutral rating
Despite recognizing long-term potential in AI-driven verticals, Merendi’s team maintained a Neutral rating, suggesting that much of the optimism is already priced into Tesla’s valuation.
“Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analyst stated.
Interestingly enough, Tesla’s core automotive business, which contributes the lion’s share of the company’s operations today, represents just 12% of total value in BofA’s model.
Elon Musk
Tesla analyst: ‘near zero chance’ Elon Musk’s $1T comp package is rejected
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
A Tesla analyst says there is “zero chance” that CEO Elon Musk’s new compensation package is rejected, a testament to the loyalty and belief many shareholders and investors have in the frontman.
Tesla investors will vote on November 6 at the annual Shareholder Meeting to approve a new compensation package for Musk, revealed by the company’s Board of Directors earlier this month.
The package, if approved, would give Musk the opportunity to earn $1 trillion in stock, an ownership concentration of over 27 percent (a major request of Musk’s), and a solidified future at the company.
The Tesla Community on X, the social media platform Musk bought in 2023, is overwhelmingly in favor of the pay package, though a handful of skeptics remain.
Nevertheless, the big pulls of this vote are held by proxy firms and other large-scale investors. Two of them, Institutional Shareholder Services (ISS) and Glass Lewis, said they would be voting against Musk’s proposed compensation plan.
Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
Today, the State Board of Administration of Florida (SBA) said it would vote in favor of Musk’s newly-proposed pay day, making it the first large-scale shareholder to announce it would support the CEO’s pay.
One analyst said that Musk’s payday is inevitable. Gary Black of the Future Fund said today there is a “near-zero chance” that shareholders will allow Musk’s pay package to be rejected:
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
He added an alternative perspective from Wedbush’s Dan Ives, who said that he had a better chance of starting for the New York Yankees than the comp package not being approved.
There is a near zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting. As Wedbush analyst Dan Ives (@divestech) colorfully put it in a Yahoo Finance interview on October 23rd: “I have a better chance of starting for…
— Gary Black (@garyblack00) October 27, 2025
Black’s the Future Fund sold its Tesla holdings earlier this year. He explained that the firm believed the company’s valuation was too disconnected from fundamentals, citing the P/E ratio of 188x and declining earnings estimates.
The firm maintained its $310 price target, and shares were trading at $356.90 that day.
Shares closed at $452.42 today.
The latest predictions from betting platform Kalshi have shown Musk’s comp package has a 94 percent chance of being approved:
— Kalshi (@Kalshi) October 20, 2025
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