Investor's Corner
Elon Musk’s SEC settlement has cleared a path for Tesla’s record-breaking Q3 results
For Tesla, the past three months have been filled with incredible milestones and daunting challenges. Since producing 5,000 Model 3 in a week at the end of Q2, the electric car maker has steadily pushed itself out of “production hell” and well into Elon Musk’s self-dubbed “delivery logistics hell.” As the final hours of the third quarter trickle down, Tesla is now on full throttle as it attempts to end Q3 2018 on a historic note.
It has not been easy for Tesla, and particularly its CEO, Elon Musk. It is not difficult to see that Musk’s status as a rockstar CEO has served Tesla well, but at the same time, some of Musk’s personal mistakes have also negatively affected the electric car maker. Earlier this month, for example, Tesla stock took a steep tumble after news of two executive departures were augmented by Musk’s actions during a podcast, which included an instance when he seemingly smoked cannabis.
Perhaps Musk’s most notable gaffe, though, was a post last August stating that he was considering taking Tesla private at $420 per share, and that he had “funding secured.” The Securities and Exchange Commission (SEC) ultimately filed a lawsuit against Musk over his “funding secured” tweet, claiming that the CEO knowingly misled investors. Musk settled with the SEC this weekend, agreeing to pay a total penalty of $40 million, comprised of a $20 million personal fine and another $20 million fine for Tesla. Part of the settlement also included Musk’s resignation as Chairman of Tesla’s Board of Directors, the appointment of two new independent directors, as well as the creation of a new committee tasked to “place additional controls and procedures to oversee Musk’s communications,” particularly on social media platforms such as Twitter.
While it is unfortunate that Elon Musk must relinquish his post as Chairman of Tesla’s Board of Directors, his settlement with the SEC could ultimately be seen as Musk’s decision to take a personal blow instead of compromising Tesla’s progress. Elon Musk, after all, reportedly rejected the SEC’s initial settlement, and by Friday, it seemed like he was preparing to battle it out with the government agency. This was one of the reasons why the SEC’s announcement on Saturday about Elon Musk’s settlement came as a welcome surprise for the Tesla community.
Ultimately, Elon Musk appears to have put Tesla before his own wishes to fight back against the SEC. And it wasn’t like he was cornered by the government agency either. Former SEC senior counsel Thomas Gorman, who is also a partner at the law firm Dorsey & Whitney, stated that the agency miscalculated when it filed a lawsuit against Musk. Gorman noted that while Elon Musk’s “funding secured” tweet last August was not smart from a business perspective, the SEC would have a very difficult time proving that the CEO actually committed fraud. Gorman further noted that the Saudi fund’s reported interest in Tesla’s take-private deal would likely be enough to make Musk’s statements legal.
“There’s a reasonable basis for what he said. I’m not questioning their motive. I just disagree with their judgment here,” Gorman said.
Ultimately, Elon Musk’s SEC settlement has now provided a clear path for Tesla to attain a record-breaking third quarter without any unnecessary drama. Elon Musk himself has noted that Tesla’s main challenge now is delivering as many vehicles to reservation holders as quickly as possible. Tesla, for its part, has begun adapting to the delivery challenges. Handovers reportedly go well into the night, home deliveries are being done to a number of reservation holders, and even owners of Tesla vehicles who are willing to volunteer their time have been tapped to help the company in its end-of-quarter push. Tesla’s production and delivery figures this Q3 would likely set new records, and with Elon Musk’s SEC lawsuit in the rearview mirror, there is very little that can come between the electric car maker and even more impressive milestones.
Elon Musk
Tesla stock gets latest synopsis from Jim Cramer: ‘It’s actually a robotics company’
“Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session,” Cramer said.
Tesla stock (NASDAQ: TSLA) got its latest synopsis from Wall Street analyst Jim Cramer, who finally realized something that many fans of the company have known all along: it’s not a car company. Instead, it’s a robotics company.
In a recent note that was released after Tesla reported Earnings in late January, Cramer seemed to recognize that the underwhelming financials and overall performance of the automotive division were not representative of the current state of affairs.
Instead, we’re seeing a company transition itself away from its early identity, essentially evolving like a caterpillar into a butterfly.
The narrative of the Earnings Call was simple: We’re not a car company, at least not from a birds-eye view. We’re an AI and Robotics company, and we are transitioning to this quicker than most people realize.
Tesla stock gets another analysis from Jim Cramer, and investors will like it
Tesla’s Q4 Earnings Call featured plenty of analysis from CEO Elon Musk and others, and some of the more minor details of the call were even indicative of a company that is moving toward AI instead of its cars. For example, the Model S and Model X will be no more after Q2, as Musk said that they serve relatively no purpose for the future.
Instead, Tesla is shifting its focus to the vehicles catered for autonomy and its Robotaxi and self-driving efforts.
Cramer recognizes this:
“…we got results from Tesla, which actually beat numbers, but nobody cares about the numbers here, as electric vehicles are the past. And according to CEO Elon Musk, the future of this company comes down to Cybercabs and humanoid robots. Stock fell more than 3% the next day. That may be because their capital expenditures budget was higher than expected, or maybe people wanted more details from the new businesses. At this point, I think Musk acolytes might be more excited about SpaceX, which is planning to come public later this year.”
He continued, highlighting the company’s true transition away from vehicles to its Cybercab, Optimus, and AI ambitions:
“I know it’s hard to believe how quickly this market can change its attitude. Last night, I heard a disastrous car company speak. Turns out it’s actually a robotics and Cybercab company, and I want to buy, buy, buy. Yes, Tesla’s the paper that turned into scissors in one session. I didn’t like it as a car company. Boy, I love it as a Cybercab and humanoid robot juggernaut. Call me a buyer and give me five robots while I’m at it.”
Cramer’s narrative seems to fit that of the most bullish Tesla investors. Anyone who is labeled a “permabull” has been echoing a similar sentiment over the past several years: Tesla is not a car company any longer.
Instead, the true focus is on the future and the potential that AI and Robotics bring to the company. It is truly difficult to put Tesla shares in the same group as companies like Ford, General Motors, and others.
Tesla shares are down less than half a percent at the time of publishing, trading at $423.69.
There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.
However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.
To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.
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Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:
“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”
Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.
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Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”
It’s not impossible
— Elon Musk (@elonmusk) February 6, 2026
Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.
Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.
Elon Musk
Tesla director pay lawsuit sees lawyer fees slashed by $100 million
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
The Delaware Supreme Court has cut more than $100 million from a legal fee award tied to a shareholder lawsuit challenging compensation paid to Tesla directors between 2017 and 2020.
The ruling leaves the case’s underlying settlement intact while significantly reducing what the plaintiffs’ attorneys will receive.
Delaware Supreme Court trims legal fees
As noted in a Bloomberg Law report, the case targeted pay granted to Tesla directors, including CEO Elon Musk, Oracle founder Larry Ellison, Kimbal Musk, and Rupert Murdoch. The Delaware Chancery Court had awarded $176 million to the plaintiffs. Tesla’s board must also return stock options and forego years worth of pay.
As per Chief Justice Collins J. Seitz Jr. in an opinion for the Delaware Supreme Court’s full five-member panel, however, the decision of the Delaware Chancery Court to award $176 million to a pension fund’s law firm “erred by including in its financial benefit analysis the intrinsic value” of options being returned by Tesla’s board.
The justices then reduced the fee award from $176 million to $70.9 million. “As we measure it, $71 million reflects a reasonable fee for counsel’s efforts and does not result in a windfall,” Chief Justice Seitz wrote.
Other settlement terms still intact
The Supreme Court upheld the settlement itself, which requires Tesla’s board to return stock and options valued at up to $735 million and to forgo three years of additional compensation worth about $184 million.
Tesla argued during oral arguments that a fee award closer to $70 million would be appropriate. Interestingly enough, back in October, Justice Karen L. Valihura noted that the $176 award was $60 million more than the Delaware judiciary’s budget from the previous year. This was quite interesting as the case was “settled midstream.”
The lawsuit was brought by a pension fund on behalf of Tesla shareholders and focused exclusively on director pay during the 2017–2020 period. The case is separate from other high-profile compensation disputes involving Elon Musk.
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