Investor's Corner
Tesla shareholder’s legal team adjusts demand to $1.44 billion in fees for Musk pay case
The legal team of Tesla shareholder Richard Tornetta, who filed a legal complaint against Elon Musk’s 2018 CEO Performance Award, has adjusted their plaintiff fee request to the Delaware Court. Tornetta’s legal team noted that they could adjust their proposed fee to just $73,948 per hour, which would amount to a cash award of roughly $1.44 billion.
The Tornetta vs. Musk case became a notable issue for the electric vehicle maker back in January when Judge Kathaleen McCormick of the Delaware Court of Chancery rescinded Musk’s 2018 CEO Performance Award. For their work in the case, Tornetta’s legal team argued that they should be granted 29.4 million TSLA shares. Such an amount would be worth over $5 billion, or more than $200,000 per hour.
Tesla has argued against Tornetta’s legal team’s arguments. As noted in a Reuters report, the electric vehicle maker argued that the legal team of the Tesla shareholder — who held nine shares when he filed his complaint against Musk’s 2018 pay package — should be paid just about $13.6 million for their work. Longtime Tesla retail shareholder Amy Steffens has also secured legal counsel to challenge the $200,000 per hour fee request of Tornetta’s attorneys.
In their recent filing, Tornetta’s legal team proposed an alternative way of looking at the fees for their work in the case. While the legal team rejected Tesla’s $13.6 million legal fee argument, and while the attorneys still argued that the court should strongly consider granting them over 29 million TSLA shares as payment, they noted that the Court could go for a cash-based alternative structure instead. Such a system would lower their hourly rate to $73,948, and would result in a payment of around $1.44 billion.
$73,948 per hour is unacceptable and highly inappropriate to request.
The ABA Rules for Professional Conduct, specifically Rule 1.5(a) states: “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses…”
In short,… https://t.co/kItq68oBAK— Jade (@ImUsuallyRighTT) June 22, 2024
Following are sections of the filing from Tornetta’s lawyers.
“While Plaintiff’s Counsel sincerely believe the award sought is appropriate, earned, and indeed conservative under Delaware law—the Action did, after all, rescind an ‘unfathomable’ $55B compensation package, the largest in history by multiples—Plaintiff’s Counsel acknowledge the requested award, if granted, would be record-setting and the subject of significant commentary. Were the Court concerned by the requested award’s size and desirous of a different approach, there are other alternatives available that address the expressed concerns about “windfalls.”
“Specifically, $35,000/hour cannot be a ‘windfall’ because that hourly rate was awarded by this Court and affirmed by the Supreme Court over a decade ago in Southern Peru. Adjusted to today’s dollars, a $35,000 hourly rate would be over $55,600/hour. It follows, a fortiori, that for a substantial verdict on the order of Southern Peru, an award of at least $55,600/hour is not a ‘windfall.’
“Indeed, even Tesla argues that this Action created compensable value equal to its calculation of the Grant’s $2.3B GDFV. But even using this low-end value estimate, the benefit Plaintiff achieved here was significantly higher than the $1.347B (pre-interest) Southern Peru benefit. Thus, a low-end cash award of roughly $1.0842B could be fashioned based solely on the affirmed, inflation-adjusted Southern Peru numbers.
“But any such award would be unfairly low for two reasons. First, as noted in Plaintiff’s Opening Brief, this Court in Southern Peru—after admonishing plaintiff’s counsel to seek a conservative fee given ‘the reality [that] their own delays affected the remedy awarded’—further reduced that request by one-third as a penalty for counsel taking so long to prosecute the case that rescission was impossible. Second, the ~$51B benefit achieved here is approximately 38x higher than the benefit achieved in Southern Peru.
“Adjusting for the one-third penalty assessed in Southern Peru—which was applied to an already conservative 22.5% request by that plaintiff—brings the inflation-adjusted lodestar to $73,948/hour, which yields a fee of approximately $1.44B. Adjusting further to reflect the much higher result here is a matter of the Court’s discretion Plaintiff’s Counsel would submit that exercising the Court’s discretion to award a cash fee of roughly twice the inflation-adjusted Southern Peru hourly rate after reversing for the discount appropriately reflects the substantially greater benefit achieved here,” Tornetta’s lawyers wrote.
The fling from Tornetta’s lawyers can be viewed below (via Plainsite).
gov.uscourts.delch.2018-0408-KSJM.387.0 by Simon Alvarez on Scribd
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Investor's Corner
Tesla Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Tesla Full Self-Driving performance and statistics continue to impress everyone, from retail investors to Wall Street firms. However, one analyst believes Tesla’s driving suite is “very close” to achieving unsupervised self-driving.
On Tuesday, Piper Sandler analyst Alexander Potter said that Tesla’s recent launch of Full Self-Driving version 14 increased the number of miles traveled between interventions by a drastic margin, based on data compiled by a Full Self-Driving Community Tracker.
🚨 Piper Sandler reiterated its Overweight rating and $500 PT on Tesla $TSLA stock
Analyst Alexander Potter said FSD is near full autonomy and latest versions showed the largest improvement in disengagements, from 440 miles to 9,200 miles between critical interventions pic.twitter.com/u4WCLfZcA9
— TESLARATI (@Teslarati) December 9, 2025
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Interestingly, there was a slight dip in the miles traveled between interventions with the release of v14.2. Piper Sandler said investor interest in FSD has increased.
Full Self-Driving has displayed several improvements with v14, including the introduction of Arrival Options that allow specific parking situations to be chosen by the driver prior to arriving at the destination. Owners can choose from Street Parking, Parking Garages, Parking Lots, Chargers, and Driveways.
Additionally, the overall improvements in performance from v13 have been evident through smoother operation, fewer mistakes during routine operation, and a more refined decision-making process.
Early versions of v14 exhibited stuttering and brake stabbing, but Tesla did a great job of confronting the issue and eliminating it altogether with the release of v14.2.
Tesla CEO Elon Musk also recently stated that the current v14.2 FSD suite is also less restrictive with drivers looking at their phones, which has caused some controversy within the community.
Although we tested it and found there were fewer nudges by the driver monitoring system to push eyes back to the road, we still would not recommend it due to laws and regulations.
Tesla Full Self-Driving v14.2.1 texting and driving: we tested it
With that being said, FSD is improving significantly with each larger rollout, and Musk believes the final piece of the puzzle will be unveiled with FSD v14.3, which could come later this year or early in 2026.
Piper Sandler reaffirmed its $500 price target on Tesla shares, as well as its ‘Overweight’ rating.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
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