TSLA Stock Up 2%, Tesla’s Elon Musk Nears $750M Options Payday ahead of Q1 Earnings Report

UTC by Daria Rud · 3 min read
TSLA Stock Up 2%, Tesla’s Elon Musk Nears $750M Options Payday ahead of Q1 Earnings Report
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As Tesla (TSLA) stock market value reached a six-month average of $96 billion, it becomes closer to a $100 billion market-cap milestone. This means Elon Musk is in line for a stock-option grant and a vast options payday. TSLA is 2.45% up in the pre-market.

Because of the coronavirus pandemic, Tesla Inc (NASDAQ: TSLA) had to close its factories and furlough employees. Tesla stock suffered at the beginning of the crisis as well. But over the last month, Tesla’s share price rallied. As a result, Tesla CEO Elon Musk is closing a huge $758 million options payday.

Tesla (TSLA) Stock Rebounds

Tesla stock has not yet hit the record $917.42 reached on February 19, 2020, but it seems to be on the way to rebound and pass over this mark. On Monday, Tesla shares jumped by 10%. The surge demonstrated investors’ optimism about the carmaker’s upcoming Q1 report as well as hopes for a soon reopening of Tesla’s plant in Fremont, California. Besides, it brought Tesla’s market capitalization to $145 billion. Yesterday, Tesla stock opened with a $795.64 price per share but lost 3.71% by the end of the session and closed at $769.12. After hours, the price surged by 1.01% to reach $776.89. At the time of writing, in the pre-market, TSLA stock is 2.45% up.

The Tesla 52-week highest stock price is $968.99, or 26% above the current share price. The 52-week low is $176.99. Notably, this year, Tesla stock’s annual change is progressive at 83.85%.

Tesla’s Big Options Payday

As Tesla stock market value reached a six-month average of $96 billion, it becomes closer to a $100 billion market-cap milestone. According to the company, it has all the chances to hit this mark within the next two months, “if the value of Tesla’s closing stock price continues near the levels seen in late April 2020.”

$100 billion market cap means Elon Musk is in line for a stock-option grant and a vast options payday. Musk has 12 tranches, each of them gives the billionaire the option to buy 1.69 million Tesla shares at $350.02 each. Then, taking Monday’s Tesla closing stock price of $798.75 as an example, Musk could sell those shares for a profit of $758 million.

Elon Musk receives options that vest based on Tesla’s market cap and milestones for revenue and profit growth instead of salary or other cash bonuses. These are the terms of his performance-based compensation package approved in 2018. Musk has already hit a growth target that allows him to vest the first options.

Tesla’s Q1 2020 Earnings: What to Expect

Tesla will deliver its first-quarter earnings report after the market close today.

According to the company’s statement, Tesla has produced almost 103,000 vehicles and delivered approximately 88,400 vehicles in the first quarter, which is its best-ever first-quarter performance. As for the earnings, analysts expect a big uptick in revenue from Q1 2019 to over $6 billion. However, they predict a loss of about $1 per share (around $0.30 on a non-GAAP basis).

Wall Street’s revenue prediction for Tesla during Q1 2020 is $6.113 billion. Estimize, the financial estimate crowdsourcing website, expects a slightly lower revenue of $6.092 billion. This is less than the $7.047 billion Tesla reported in revenue during the previous quarter, but it surpasses the $4.5 billion the company had in Q1 2019.

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Daria Rud
Author: Daria Rud

Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.

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