Blackrock Might Invest into Elon Musk’s Tesla Stock


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The biggest fund in the world Blackrock considering environmental sustainability investments.

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DAVOS, Switzerland — BlackRock Chairman and CEO Larry Fink feared his annual letter to chief executives would trigger a “severe backlash” against the world’s largest investment firm, particularly because many of its clients are big hydrocarbon producers.
Fink warned CEOs earlier this month that an intensifying climate crisis would bring about a “fundamental reshaping of finance,” with a significant reallocation of capital set to take place “sooner than most anticipate.”
It marked a stunning shift by the world’s top asset manager, following growing pressure from investors and climate activists about its investing practices.
“I actually thought we were going to have a severe backlash on this one,” Fink said at a World Economic Forum session on Thursday.
That’s “because we manage money for countries that are big hydrocarbon producers (and) we manage money in the United States where the states are totally dependent on hydrocarbons for their economy.”
“And yet, we can talk about the public narrative, but the private conversations we had with our clients I would say was 99:1 in favour,” Fink said.
BlackRock’s assets under management totaled nearly $7 trillion in the third quarter of 2019.
‘Overabundance of capital’ will help mitigate climate risks
In Fink’s letter, published Jan. 14, the New York-based investment firm explained how it would avoid investments in companies that have a high sustainability-related risk.
It would also start to exit investments in coal production, introduce funds that ban fossil-fuel stocks and vote against corporate managers who aren’t making progress on fighting the climate crisis.
The announcement was largely seen as a major step forward by climate activists, but many wanted the asset manager to expand its commitments to help other financial institutions follow suit.
Fink’s comments in Davos, Switzerland came as many of the world’s policymakers and business leaders gathered in the luxury ski resort to discuss how best to fight the climate emergency.
The event, which is often criticized for being out of touch with reality, has said it aims to assist governments and international institutions in tracking progress toward the Paris Agreement and the U.N.’s Sustainable Development Goals.
It follows a 12-month period that saw the hottest year on record for the world’s oceans, the second-hottest year for global average temperatures and wildfires from the U.S. to the Amazon and Australia.
“This is the beauty of capital markets. When more people believe in something, we bring the problem forward,” Fink said Thursday.
“Through that reallocation of capital, we are going to see an overabundance of capital available to mitigate” some of the problems associated with the climate crisis, he said.
Fink said the problem was not going to be capital markets or capitalism, but rather whether governments would have the “fortitude” to act.

Tesla reached a $105 billion market cap for the first time at the beginning of trading last Wednesday, setting CEO Elon Musk up for a large payout.

Tesla’s stock was up more than 6% early Wednesday, pushing its market cap to $104 billion. It’s market cap opened at $103.12 billion.

The gains could send CEO Elon Musk home with a tidy payout. In 2018, Tesla’s board and shareholders authorized a compensation plan for Musk, allowing him to earn options worth potentially more than $55 billion over the next decade. Musk would earn the first tranche of at least $346 million in options if Tesla’s market capitalization hits and stays at $100 billion.

Musk currently draws no salary, although he owns around 20% of the company.

To earn the payout, the company must keep its market cap above $100 billion long enough to sustain that level on both a 30-day and six-month trailing average, according to a regulatory filing. The company must also hit annual revenue or EBITDA milestones at the same time in order for Musk to get that first tranche. The company would need to report either trailing four-quarter revenue of $20 billion or EBITDA (minus stock-based compensation) of $1.5 billion.

That’s all assuming the compensation plan holds up in court.

Tesla stockholder Richard Tornetta sued Musk and members of Tesla’s board of directors in a Delaware Chancery Court, alleging that the award is excessive, and the board’s vote to give it to him amounts to a breach of fiduciary duty.

Description Source: CNBC

#Tesla #ElonMusk #Stocks
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31 replies
  1. Kenz300 x
    Kenz300 x says:

    BLackRock sees the risk in fossil fuels and will be divesting.
    How long before Vanguard, Fidelity and Chase follow their lead ?
    Last one out will loose the most money.
    Looks like fossil fuels will be a bad investment going forward as people run for the exits.

    Reply
  2. Decentralized
    Decentralized says:

    There is two types of information. Information for the masses and information for the classes. You can take either info from the charts or the news. Charts takes skill and some knowledge anyone can achieve if you take your time. News is just too easily available.

    Reply
  3. CALEBBY PRODUCTIONS
    CALEBBY PRODUCTIONS says:

    Yay! Tesla Sunday! Totally believe Elon Musk will be able to move Tesla forward as he had done in the past. With his personal incentives and vision aligned with Tesla, it's a force to be reckoned with for sure! Just not sure what would his compensation package be in the future after that 650billion market cap and earnings and revenue being hit.

    Reply
  4. Harry Chu
    Harry Chu says:

    Elon's compensation is aligned to shareholder interest. There is a reasonable case to be made that the $100 billion market cap will be the strong support level for the stock. Accordingly, I expect that institutional traders are and will continue to build positions as the bull thesis is continuing to prove accurate. Latter in 2020, there is a fair chance that Tesla will be added to the S&P which will accelerate the institutional money coming in.

    I am continuing to buy. The stock has turned a corner with the introduction of GF3.

    Reply

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