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Tesla whale calls for $15B share buyback as stocks took hit from Musk's Twitter deal
By Arghyadeep Dutta - May 19, 2022, 04:44 PM ET
Last Updated - Feb 29, 2024, 07:10 AM EST
Billionaire Leo KoGuan, a major individual shareholder in Tesla Inc (NASDAQ: TSLA), on Thursday called on the electric carmaker to buy back $15 billion stock after the company’s shares took a hit from CEO Elon Musk’s deal to buy Twitter Inc (NYSE: TWTR)
• KoGuan said Tesla should buyback $5 billion of Tesla shares this year and $10 billion next year
• Share buyback helps a company boost its stock price along with return some capital to shareholders
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Billionaire Leo KoGuan, a major individual shareholder in Tesla Inc (NASDAQ: TSLA), on Thursday called on the electric carmaker to buy back $15 billion stock after the company’s shares took a hit from CEO Elon Musk’s deal to buy Twitter Inc (NYSE: TWTR).
In a tweet to Martin Viecha, Tesla’s head of investor relations, KoGuan wrote, “Tesla must announce immediately and buy back $5 billion of Tesla shares from its free cash flow this year and $10 billion from its free cash flow next year, without effecting its existing $18 billion cash reserves with ZERO debt.”
In a follow-up tweet, KoGuan said Tesla’s free cash flow amounted to $2.2 billion in the first quarter of 2022, and he expects it to climb to $8 billion this year and $17 billion next year after factoring in all the capital expenditures.
He also tweeted that Tesla can invest in full self-driving (FSD) and new factories while buying back its “undervalued stocks.”
The comments came as Wedbush analyst and Tesla bull Daniel Ives cut the target share price of the carmaker due to the production disruption in China and warned of “distraction risks” from Musk’s Twitter deal.
Tesla shares have lost nearly 40% of their value since Musk disclosed his stake in Twitter in early April.
Furthermore, COVID-19 lockdowns in China dampened Tesla’s production.
S&P Dow Jones Indices has removed the electric carmaker from its sustainability-focused widely-followed S&P 500 ESG Index, citing issues including racial discrimination claims and crashes linked to its autopilot vehicles.
Picture Credit: Business Insider
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