Weekly forecast: Investor reaction to Elon Musk $1 trillion reward sparks sell-off

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Yaroslav Dmytrenko

09.11.2025

Weekly forecast: Investor reaction to Elon Musk $1 trillion reward sparks sell-off — Tesla stock drops 7% as Musk’s pay plan stirs debate

At the end of the week, Tesla shares fell about 7% over two days amid uncertainty surrounding the shareholder meeting where Elon Musk presented the company’s growth plan and compensation structure tied to performance targets.

While many media outlets reacted enthusiastically to the meeting results, investor sentiment turned negative as discussions shifted toward Musk’s personal compensation rather than Tesla’s operational outlook, making the stock more vulnerable to short-term selling.

Following the meeting, Elon Musk will receive a stock grant giving him an additional 423.7 million Tesla shares over the next 10 years. One of the conditions is achieving a market capitalization of $8.5 trillion — making the package potentially worth $1 trillion and Musk the world’s first trillionaire.However, this compensation plan is divided into 12 tranches based on specific operational or financial milestones, meaning the maximum payout is not guaranteed.

According to Bloomberg, Musk’s net worth already stands at $473 billion, largely thanks to his stakes in Tesla, SpaceX, and xAI, so the $1 trillion goal seems achievable.

Had shareholders rejected the proposed compensation package, it could have led to Musk’s resignation as CEO. Tesla’s board confirmed that Musk had raised the possibility of leaving if he did not receive control assurances tied to the pay plan.

For Tesla to reach the required $8.5 trillion market value, its shares would need to soar 466% from current levels — around 70% higher than Nvidia’s record $5 trillion valuation achieved last week.

A correction now seems more than likely

Currently, tech stocks are under pressure due to labor-market uncertainty, sluggish job growth, and Tesla’s own challenges such as the removal of EV purchase subsidies in the U.S. As a result, analysts view Tesla’s shares as somewhat overvalued. The average 12-month target price is about $390-$400, implying a 7–10% downside from current levels.

“Tesla’s current share price leaves little room for error — given its high valuation and mixed demand signals, a correction looks more likely than a sharp rally. I expect the stock to edge lower over the next week unless a clear catalyst emerges,” said analyst Anton Kharitonov.

TSLA stock price daily chart for August–November 2025. Source: TradingView

However, should positive news or stronger demand data appear — for instance, upbeat EV delivery figures or favorable rate changes — the stock could rebound by 3–5%. Absent that, the downside risk remains greater.

As we wrote, Tesla stock gains 3.7% as Musk teases flying car prototype

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