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Tesla Shares Rise as Musk Promises Cheaper EVs and Autonomous Ride-Hailing

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Tesla shares climbed more than 2% on Thursday after CEO Elon Musk announced plans to launch lower-cost electric vehicles (EVs) in the first half of 2025 and begin testing an autonomous ride-hailing service in June. These commitments helped investors look past a weaker-than-expected fourth quarter, which saw declining revenue and shrinking margins due to delayed model upgrades and rising competition.

Despite Tesla’s first annual decline in deliveries in 2024, the company assured investors that its vehicle business would return to growth in 2025. However, Tesla did not reaffirm Musk’s earlier forecast of a 20-30% sales increase for next year.

Morgan Stanley analysts noted that Tesla is shifting from being a traditional automotive company to a diversified player in AI and robotics. Investors remain optimistic, especially as Musk’s support for U.S. President Donald Trump could lead to more favorable regulatory conditions for Tesla’s robotaxi ambitions.

Musk revealed that Tesla will begin unsupervised testing of its autonomous ride-hailing service in Austin, Texas, though he did not provide specific details on how it would function. The company also did not share pricing details for its upcoming affordable EV models.

If Tesla’s stock gains hold, its market value could rise by approximately $28 billion. The stock surged 62.5% in 2024 and is currently trading at 118 times its 12-month forward earnings, significantly higher than Ford (6.07) and General Motors (4.48).

At least 19 brokerages have raised their price targets for Tesla stock, with a median target of $300, up from $278 at the end of December. Analysts believe that Tesla’s growth will be fueled by Full Self-Driving technology and the introduction of an affordable EV. However, some experts remain cautious about Musk’s timeline for launching robotaxis, citing regulatory challenges, particularly in Europe and China.

Tesla also announced an increase in its capital expenditure forecast, expecting to spend over $11 billion in 2025 and the following two fiscal years.

 

Meta’s ‘Community Notes’ System Reportedly Excludes Paid Advertisements

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Meta, the parent company of Facebook, has revealed that its upcoming “Community Notes” feature, which draws inspiration from the model used on Elon Musk’s social media platform X, will not extend to paid advertisements. According to a source familiar with the matter, this new feature is expected to be introduced later this year in the United States. Meta plans to gradually roll out the system over the next few months, with continuous evaluation and adjustments anticipated throughout the year. A spokesperson for Meta emphasized that the company is still refining the product and intends to improve it as it moves forward.

The Community Notes feature is designed to allow users to provide context and additional information on content shared across Meta’s platforms. However, the spokesperson clarified that paid ads will be excluded from this system, meaning that advertisements will not be subject to community-driven fact-checking or clarification in the same way as organic posts. This distinction highlights Meta’s approach to balancing user interaction and the commercial aspects of its platform, ensuring that paid content remains under the purview of the company’s standard advertising policies.

In the context of the upcoming political climate, Meta is undergoing significant changes in how it manages content, particularly related to political discourse. Last week, the company made headlines by discontinuing its US fact-checking program, marking a shift in its approach to moderating political content. Instead, Meta has announced plans to implement the “Community Notes” system to manage the accuracy and context of posts surrounding sensitive topics. This change is seen as part of Meta’s broader efforts to navigate the evolving landscape of content moderation and user-generated information, especially in the run-up to the inauguration of US President-elect Donald Trump.

While the company has confirmed some details about the transition to Community Notes, a Meta spokesperson emphasized that further information beyond what has already been publicly shared remains speculative. As the rollout of this new system continues, it will likely be closely watched, both by users and regulatory bodies, as Meta seeks to address concerns about misinformation while still supporting a diverse range of viewpoints on its platforms.

Elon Musk Faces SEC Lawsuit Over Delayed Twitter Stake Disclosure

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Elon Musk Sued by SEC for Delayed Disclosure of Twitter Stake

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, alleging that the billionaire delayed disclosing his substantial stake in Twitter during 2022. The SEC claims that Musk, who later acquired the social media company, violated federal securities law by failing to report his initial purchase of 5 percent of Twitter’s common shares within the required 10-day timeframe. This delay, according to the SEC, allowed Musk to buy additional shares at artificially low prices before making his holdings public.

Allegations of Investor Harm

According to the complaint filed in Washington, D.C.’s federal court, Musk was obligated to disclose his holdings by March 24, 2022, but waited until April 4 to announce his 9.2 percent stake in the company. The SEC alleges that this delay resulted in unsuspecting investors selling their shares at undervalued prices. Between March 24 and April 4, Musk purchased over $500 million (roughly Rs. 4,324 crore) worth of Twitter stock. When Musk finally disclosed his holdings, Twitter’s stock price surged by more than 27 percent, significantly increasing the value of his investment.

Legal and Financial Repercussions

The SEC’s lawsuit aims to hold Musk accountable for his alleged violation of securities law. The agency is seeking a civil fine and the disgorgement of any profits Musk accrued through his delayed disclosure. These penalties, if enforced, could set a precedent for how high-profile investors handle regulatory requirements regarding stake disclosures.

Broader Implications

This lawsuit underscores the importance of timely disclosure in financial markets, particularly for influential figures like Musk, whose actions can significantly impact stock prices. The case also highlights the regulatory challenges posed by high-profile investors who engage in large-scale transactions. As the proceedings unfold, the outcome could have broader implications for securities law enforcement and market transparency, particularly in cases involving influential public figures and major corporate investments.