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Tesla legal team looks to delay July hearing in Musk comp package case

MINISTÉRIO DAS COMUNICAÇÕES, CC BY 2.0 , via Wikimedia Commons

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Elon Musk’s lawyers are seeking a delay in a hearing that would determine the legal fees that will be awarded to the legal team who challenged the CEO’s 2018 Performance Award. Tesla’s legal team noted that a recent shareholder vote which ratified Musk’s 2018 compensation plan impacts what remains to be decided in the case. 

Tesla filed a motion on Friday requesting a postponement of the July 8th hearing, as noted in a Bloomberg News report. With the results of the 2024 Annual Stockholders’ Meeting in mind, Tesla noted that a delay in the hearing date would be pertinent so that its legal team could lay out the implications of the TSLA shareholders’ vote

“Defendants respectfully submit that this Court should vacate the current Scheduling Order. In its place, the Court should enter an order setting forth an expeditious schedule to address the impact of the Ratification. Defendants will move for entry of judgment in their favor based upon the Ratification and propose to submit that motion and an opening brief of no more than 14,000 words on June 28, 2024.,” Tesla’s legal team wrote.

Delaware Chancery Court Judge Kathaleen St. J. McCormick is expected to hear arguments on whether the lawyers of Tesla shareholder Richard Tornetta — who filed the case against Musk’s 2018 pay package — should be awarded billions of dollars in Tesla stock, equivalent to over $200,000 per hour. Recent filings from Tornetta’s attorneys indicated that the lawyers are willing to drop their requested payment to $1.44 billion in legal fees, or $73,948 per hour, for their work in the case. 

Tesla has argued that Tornetta’s lawyers should just be paid about $13.6 million for their work. A longtime Tesla shareholder has also secured legal representation to oppose the requested legal fees of Tornetta’s attorneys.

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Delaying the next hearing in the case would likely push back Judge McCormick’s decision surrounding the fees that would be awarded to Tornetta’s lawyers. The Judge is poised to rule on the Plaintiff’s legal fees before she can issue a final judgment on the case. Judge McCormick’s final judgment could clear the way for Elon Musk and Tesla to appeal to the Delaware Supreme Court if needed. 

The fling from Tesla’s legal team can be viewed below (via Plainsite).

gov.uscourts.delch.2018-0408-KSJM.386.0 by Simon Alvarez on Scribd

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Financial Times retracts report on Tesla’s alleged shady accounting

“Turns out FT can’t do finance,” Tesla CEO Elon Musk quipped on X.

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Credit: Tesla Asia/X

The Financial Times has issued a retraction for an article it recently published that accused the electric vehicle maker of shady accounting practices.

The FT’s retraction has been appreciated by the electric vehicle community in social media, though many highlighted the fact that the publication’s initial erroneous allegations have already been spread across numerous other media outlets.

The Allegations

In an article published on March 19, the Financial Times pointed out that if one were to compare “Tesla’s capital expenditure in the last six months of 2024 to its valuation of the assets that money was spent on,” “$1.4 billion appears to have gone astray.”

The FT article highlighted that Tesla reported spending $6.3 billion on “purchases of property and equipment excluding finance leases, net of sales” in the second half of 2024. However, in that period, the company’s property, plant, and equipment only rose by $4.9 billion. As noted by members of the r/Accounting subreddit, this appeared to be the basis of the FT‘s article, which seemed careless at best.

Unfortunately, the publication’s allegations were quickly echoed by other news outlets, many of which proceeded to accuse Tesla of implementing shady accounting practices.

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The Retraction

In its retraction, the Financial Times explained that Tesla’s payments for assets already purchased and the possible disposal of depreciated property could help explain the alleged discrepancy in the company’s numbers. With these in consideration, the publication noted that the “crack we’re left with at Tesla is now small enough — just under half a billion dollars — to be filled with some combination of foreign exchange movements, non-material asset write-offs, or the sale of machinery or equipment close to its not-fully depreciated value.”

“As we sound the Alphaville bugle while lowering this particular red flag, one unavoidable conclusion is that at a certain point it’s necessary to trust the auditor’s judgment,” the publication noted.

Tesla CEO Elon Musk has responded to the Financial Times‘ retraction, commenting, “Turns out FT can’t do finance” in a post on social media platform X.

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Canaccord reaffirms Tesla’s price target of $404 after Giga Texas visit

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Credit: Tesla Asia/X

Canaccord Genuity reaffirmed its price target of $404 for Tesla after a visit to Gigafactory Texas. The investment firm sees an optimistic future for Tesla in the long term despite near-term headwinds.

Canaccord analysts reiterated its “Buy” rating for TSLA stock and revised Tesla’s Q1 2025 delivery estimates from ~331,000 vehicles to ~362,000 units. The firm’s first-quarter delivery estimates for Tesla reveal its optimistic take on the company’s future, even though it is still below the consensus estimate of ~417,000 vehicles.

“Our estimate is informed by our opinion that some consumers are delaying vehicle purchases to access the new Model Y and 4Q24 earnings call commentary regarding Model Y-related factory retooling limiting production…We wonder whether purchase decision delays and production limitations are being misinterpreted as halted overall momentum for Tesla. While we do suspect there has been some macroeconomic/brand impact, we, again, do estimate 1Q25 deliveries are mostly being impacted by supply constraints–as well as some demand factors,” Canaccord Genuity noted.

Canaccord analysts recently visited Tesla Giga Texas and left with optimism for the American electric vehicle (EV) maker.

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“It’s hard not to be impressed with how future-forward Tesla is–whether it’s vehicle design or manufacturing. Consistently rethinking the status quo,” Canaccord Genuity analysts commented.

Analysts highlighted Tesla’s progress with Full Self-Driving, specifically version 13.2.8. They noted that Tesla’s unboxed manufacturing strategy would boost production efficiencies. Canaccord Genuity analysts also mentioned that Tesla’s robotaxi services will launch in Austin in the summer.

“For investors with duration and grit, there is a silver-linings playbook,” the Canaccord Genuity analysts concluded.

Canaccord Genuity reflects Elon Musk’s recent stock market advice during the Tesla All-Hands keynote. Musk advised investors to invest in companies with products they love, highlighting that Tesla has a few great products and will continue to launch more.

“Tesla stock goes up and goes down, but actually, it’s still the same company,” Musk noted.

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Tesla stock rebounds and Tim Walz backtracks: ‘I was making a joke’

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Credit: @TeslaFrenzy/X

Tesla stock rebounded over 20 percent in the past five trading days, and, coincidentally, the boost came just after Tim Walz said he gets a boost from watching the automaker’s shares fall.

Although Walz’s pushback against Tesla stock mostly comes from his evident distaste for CEO Elon Musk, who has joined President Donald Trump’s team as the head of the Department of Government Efficiency (DOGE), it seems he might not have realized the EV maker’s shares make up a portion of his state’s pension fund.

This was something Shark Tank’s Kevin O’Leary mentioned last week after Walz’s comments. However, now that Tesla shares are rising once again, Walz is backtracking by saying that his comment from last week was his attempt at humor.

Walz said:

“I have to be careful about being a smartass. I was making a joke. These people have no sense of humor.”

Tesla shares have rebounded nicely since a substantial drop so far this year.

Although the stock is still down about 28 percent this year, things are looking better for the company as it now shifts its focus to the release of several affordable models, the ramp of the new Model Y “Juniper,” the release of the Cybercab and Robotaxi platform in Texas and California, and other potential catalysts like the Optimus robot.

Tesla aiming to produce first “legion” of Optimus robots this 2025

Last week’s All-Hands meeting from Tesla was publicly broadcast on X and seemed to be the response many investors were hoping for as questions started to seep in regarding Musk’s commitment to the company.

While his attention seems to be on solving government spending and eliminating corruption, it is evident Musk is still paying attention to what is going on at Tesla.

Shares are up over 10 percent at 1:05 p.m. on the East Coast, trading at around $274.

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