Investor's Corner
Tesla hit with new lawsuit over Musk’s stock sale Twitter poll, Warren Tweets
Tesla is being hit with a new lawsuit from institutional investors that questions whether the frontman’s Tweets are being reviewed. Several Tweets brought on the lawsuit, including one, sent on November 6th that polled Musk’s over 66 million followers whether he should sell 10% of his Tesla stock holdings. Additionally, Musk’s recent feud with Massachusetts Democrat Elizabeth Warren has also contributed to the lawsuit.
Musk is not formally listed as a defendant in the complaint.
Filed in the Delaware Chancery Court, the lawsuit accuses Musk of Tweeting in a manner that could affect the value of Tesla stock. According to Bloomberg Law, who discovered the lawsuit, the plaintiff is questioning whether Musk’s Tweets are under review in accordance with a 2019 settlement with the SEC, which required Tesla to “establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications.”
“It is unclear who at Tesla, if anyone, is currently reviewing Musk’s tweets,” the lawsuit claims. “Musk remains undeterred and continues to post on Twitter and social media on matters that are material to Tesla and its stockholders, and which ultimately have an impact on Tesla’s stock prices.”
Tesla does not currently have a General Counsel in its legal department, which is likely the person who would be required to review Musk’s Tweets before they are sent. In December 2019, Johnathan Chang left the company and was its last full-time General Counsel. The company assigned Lynn Miller to the position shortly thereafter, but she left Tesla in June for autonomous trucking startup Plus.
-->Musk’s November 6th poll was sent after many days of speculation of whether the billionaire CEO, whose net worth has skyrocketed over the past two years thanks to Tesla stock, would pay capital gains taxes. Technically, the capital gains tax is a levy on the profit from an investment that is incurred only when the investment is sold. Because Musk had not sold any of his holdings, he technically would not be required to pay any taxes on his unrealized gains from Tesla’s increase in stock price.
I will abide by the results of this poll, whichever way it goes
— Elon Musk (@elonmusk) November 6, 2021
However, Musk was willing to sell 10% of his holdings and will pay a $15 billion tax bill based on options that will expire in August 2022. Tesla said in a 10-Q filing earlier this year:
“If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock to satisfy his loan obligations if he could not do so through other means. Any such sales could cause the price of our common stock to decline further.”
-->Musk will have to pay income tax on the options because he has to exercise them due to their expiration date. They are taxed as an employee benefit or compensation, according to CNBC, and he will pay a combined federal and state tax rate of 54.1%, or roughly $15 billion, as his gains on the options will be just under $28 billion.
The lawsuit also highlights a recent Twitter feud with Senator Elizabeth Warren, which has been a popular topic this week. Warren referred to Musk as a “freeloader” earlier this week, which brought a barrage of challenges from Musk, who reminded Warren of his massive tax bill and shared a 2019 article that called her a “fraud” for claiming to be Native American.
The complaint requests that shareholders be given internal files from Tesla for inspection. Under Delaware law, shareholders of a public company who “credible suspect corporate wrongdoing” have the right to inspect these documents.
The case is Wagner v. Tesla Inc., Del. Ch., No. 2021-1090. The complaint was filed on December 16th.
Disclosure: Joey Klender is a TSLA Shareholder.
-->I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
-->Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
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