Tesla stock ended its day higher for the second day in a row, but it appears to have more to do with developments in the U.S. Treasury market than the latest news about CEO Elon Musk's pay and compensation.
The electric vehicle company closed Thursday at $200.45, up 6.2%. The S&P 500 rose 0.6%. The Nasdaq Composite rose 0.3%.
Investors are closely watching developments surrounding a Delaware state court's January decision to void CEO Elon Musk's $56 billion compensation following a shareholder challenge. Musk and Tesla shareholders asked the judge to put the ruling on hold until the appeal is resolved, according to a court letter reported by Reuters on Wednesday.
That news is unlikely to have moved the stock price. An appeal was expected. Tesla did not respond to requests for comment on the letter.
Also on Wednesday, the company filed documents with the Securities and Exchange Commission detailing Musk's Tesla stock holdings. He controls just over 20% of the company's stock, including options that are part of the Delaware judgment, according to filings. This is unchanged from a year ago, indicating that CEO stock holdings are not affected by the Delaware decision.
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Several headlines have surfaced that Musk has increased his ownership in Tesla stock to more than 20%. Gary Black, a co-founder of the Future Fund Active ETF and a Tesla shareholder, said Thursday's move left the stock-and-stock-option structure and the total number of shares controlled by Musk unchanged. These were dismissed as valid reasons.
Investors likely took the filing as a sign that the CEO's stock holdings were not affected by the Delaware decision. That may be the reason for the excitement, but the case is not over yet.
The yield on the 10-year U.S. Treasury note fell slightly in Thursday trading, a positive boost for auto stocks. Many cars are purchased with financing, so lower borrowing costs mean cheaper cars.
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Most auto stocks rose on Thursday. Rivian stock rose 5.2%.
Yields fell on Thursday after rising about 0.1 percentage point on Tuesday. News that inflation was lower than expected in January raised expectations that the U.S. Federal Reserve will hold off on cutting interest rates for a longer period of time than investors expected. Most auto stocks fell after Tuesday's announcement, but recovered most of their losses.
Tesla is well above its 52-week high of $299.29 hit last summer.
Email Rupert Steiner at rupert.steiner@barrons.com.