What Happened?

Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 2.8% in the afternoon session after a Delaware Supreme Court ruling restored CEO Elon Musk's 2018 compensation plan, ending a long-running legal battle. 

The court reversed a lower court's decision to cancel the $56 billion pay package. This news removed a significant legal uncertainty that had loomed over the company. Adding to the positive sentiment, the company reportedly began testing fully driverless vehicles in Austin, Texas, without safety drivers, marking a major step toward commercial autonomous driving. Investor focus also turned to Tesla's 2026 product plans, which included a sub-$25,000 model and the first commercial use of its Cybercab. Further bolstering confidence, Deutsche Bank and RBC both raised their price targets on the stock.

After the initial pop the shares cooled down to $493.17, up 2.5% from previous close.

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What Is The Market Telling Us

Tesla’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 4 days ago when the stock gained 4.4% on the news that the stock's positive momentum continued as reports of a significant Cybertruck purchase by Elon Musk's SpaceX. 

The electric vehicle maker's stock rebounded after it was revealed that SpaceX bought tens of millions of dollars' worth of Cybertrucks. This move was seen as a way to boost demand, as it was reported that demand for the truck had not yet met Tesla's planned production capacity. 

Adding to the positive news, Tesla's energy arm also made headlines. The company entered a three-year European agreement with French services provider SPIE SA to deliver battery energy storage system projects using its Megapack solutions.

Tesla is up 30% since the beginning of the year, and at $493.17 per share, has set a new 52-week high. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $2,310.

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