Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Discoducky]

Share buyback is the best way of transferring hard earned cash from the company to short term speculators or worse shorts. Longs will not be the beneficiaries.

On the positive side though, I am guessing it reduces the free float and hence decreases volatility.. maybe. I am sure others can correct me on that.

Elon will never spend a penny on stock buyback just like marketing. Why? He'll always prioritize spending on physics first principles, like engineering headcount. It simply does NOT matter as it is at its best an indirect positive to the mission.

IMO, talking about this is moot for Tesla or any Elon run company. Other CEOs are materially different...

 

[Thumper]

New poll:

Poll; Does Elon want the TSLA market cap to increase?

Over what time interval?

 

[AudubonB]

Crikeys. Am I going to have to write Mod posts unembolded so that they stand out?

No….even when I force unembold, it reverts.

 

[Ogre]

I can try.

I think share buybacks are misunderstood by many who appear to think the idea behind them is to create demand for the shares which will boost the share price. What buybacks actually accomplish is to make each share represent a larger percentage of the company. This is a fact. So, to say "longs will not be the beneficiaries" is factually incorrect.

There should be no significant effect on volatility but if I were to argue one way or the other, I would say buybacks decrease the float and therefore increase the potential volatility.

This is what I was going to say as well.

Buybacks absolutly help long term investors. Lots of examples where it does.

The bigger question is whether there are better ways Tesla can spend the cash long term. Having a healthy amount of cash on the balance sheet helps the company a lot, particularly if there is a recession or downturn and competitors are cash poor.

 

[StealthP3D]

Elon will never spend a penny on stock buyback just like marketing. Why? He'll always prioritize spending on physics first principles, like engineering headcount. It simply does NOT matter as it is at its best an indirect positive to the mission.

IMO, talking about this is moot for Tesla or any Elon run company. Other CEOs are materially different...

If the shares of a company are significantly undervalued, then buying the shares can actually be the best use of corporate funds. The reason for this is that share buybacks increase the percentage of the company owned by every shareholder and, since the premise is the shares are undervalued, it accomplishes this in a cost-effective manner.

Of course, this doesn't make sense if it prevents the company from investing the cash in more profitable initiatives, it just depends upon how under-valued the company's shares are and whether the company's growth initiatives are cash constrained or not.

 

[AudubonB]

Until Alaska is as well-serviced with Superchargers as are less scattered-population regions, I will fight share buybacks tooth and nail.

 

[TheTalkingMule]

Until Alaska is as well-serviced with Superchargers as are less scattered-population regions, I will fight share buybacks tooth and nail.

There's like 7 people in Alaska!

You'd be better off developing deployable solar canopy charging. Throw it in the trunk and pop it out for a quick 4hr charging session.

Maybe a wind turbine that folds down into the rear bumper?

 

[Discoducky]

If the shares of a company are significantly undervalued, then buying the shares can actually be the best use of corporate funds. The reason for this is that share buybacks increase the percentage of the company owned by every shareholder and, since the premise is the shares are undervalued, it accomplishes this in a cost-effective manner.

Of course, this doesn't make sense if it prevents the company from investing the cash in more profitable initiatives, it just depends upon how under-valued the company's shares are and whether the company's growth initiatives are cash constrained or not.

Someone at the next annual shareholders meeting: Hi Elon, long time investor, I'm wondering if you could ever see a time when Tesla would do a share buyback? I mean, is there anything that could possibly happen that would cause this to be a good way to spend part of the warchest?
Elon: Hold my beer! Well, maybe, if Tesla has no other engineering goals, regardless of profitability or not, regardless of the share price, then maybe...

Again, any other CEO would think differently, but Elon will always find a better way to spend cash according to his principles. I think he's been pretty clear on this sentiment.

 

[ZsoZso]

There's like 7 people in Alaska!

You'd be better off developing deployable solar canopy charging. Throw it in the trunk and pop it out for a quick 4hr charging session.

Maybe a wind turbine that folds down into the rear bumper?

 

[Hock1]

OMG, so short-sellers can recoup their losses then! If they started their short in the morning and closed out their position after the tweet (to limit their losses), then they'll fall right in the scope of the conditions!

Short-sellers Enrichment indeed!

But if they bought to close, how could they be termed "an investor", as they have no shares.

 

[Dutchie]

Hmmm. Wondering if expanding FSD Autosteer on City Streets to 100k cars will release a portion of the Deferred FSD Revenue to Q2 Earnings?
Per the Q1 10Q, Tesla expects to earn about $1.6B in the next 12 months from revenue that had been deferred. I wonder how much of this $1.6B will show up in Q2? if any?


View attachment 812796

Don’t think so as it is BETA, so not a final product

 

[UkNorthampton]

NB. Fortune favours the bold

In case anyone hasn't seen it

"As a work around, you can close the podcast notification banner, which appears to be where the bold formatting is coming from. This should return your view to "pre bold" levels."

Fonts bold letters - is it only me or TMC changed the default font to bold?

My TMC fonts are in bold, is it just in my ipad or one of the new updates to TMC website like Tesla does?

teslamotorsclub.com

Seems like a bit of stray CSS emboldening all posts. For me, I have to close banner and then refresh page

 

[Ohmster]

Yesterday Lord Musk tweeted Beta expansion to 100K.
Safety score 98.
Hours later saw that an update was available...

Can't wait to go for a ride today!

Turns out, I can confirm. With 99 safety score, it just installed and I took a confirmation drive.

My Plaid which I drive exclusively is at 95% safety score.

Our MYP, which we both drive, is at 97%.

Last night’s update incorporated us into FSD Beta. So cool!!!!

 

[wipster]

<snip>
Seems like a bit of stray CSS emboldening all posts. For me, I have to close banner and then refresh page

Thanks UK, worked like a charm!

p.s. Say hi to the Queen for me!

 

[Ogre]

Someone at the next annual shareholders meeting: Hi Elon, long time investor, I'm wondering if you could ever see a time when Tesla would do a share buyback? I mean, is there anything that could possibly happen that would cause this to be a good way to spend part of the warchest?
Elon: Hold my beer! Well, maybe, if Tesla has no other engineering goals, regardless of profitability or not, regardless of the share price, then maybe...

Again, any other CEO would think differently, but Elon will always find a better way to spend cash according to his principles. I think he's been pretty clear on this sentiment.

Tesla has $18b in cash. It’s a bunch, but not particularly egregious and Tesla has a fair number of ways they can deploy large amounts of cash. Apple didn’t start their share buybacks until they had over $100 billion. Berkshire was similarly slow to initiate buybacks. In Apples case their buyback program massively, benefitted shareholder… but they still keep an absolutely massive cash hoard for rainy days. Likewise BRK. These are well run, disciplined companies which have weathered the recent stock market downturns extremely well.

If you spend money on buybacks too soon, you can miss out on opportunities or run into unneeded solvency problems. The urge to spend Tesla’s cash to buy back shares seems to largely come from shareholders who are less interested in long term and more interested in shoring up the SP in the short term which is the wrong reason to buy shares back.

 

[StarFoxisDown!]

Don’t think so as it is BETA, so not a final product

Beta doesn't matter. It's just a word.

What matters is the functionality for every feature exists that was advertised and is available to every person that purchased FSD (in the corresponding territory such as United States, Canada, Europe, China, etc..)

The features don't even have to working perfectly. They just have to be working and available to anyone that purchased or wants to purchase FSD.

 

[ZeApelido]

Have I been ordained to change GoJo’s mind?

 

[⚡️ELECTROMAN⚡️]

Tesla has $18b in cash. It’s a bunch, but not particularly egregious and Tesla has a fair number of ways they can deploy large amounts of cash. Apple didn’t start their share buybacks until they had over $100 billion. Berkshire was similarly slow to initiate buybacks. In Apples case their buyback program massively, benefitted shareholder… but they still keep an absolutely massive cash hoard for rainy days. Likewise BRK. These are well run, disciplined companies which have weathered the recent stock market downturns extremely well.

If you spend money on buybacks too soon, you can miss out on opportunities or run into unneeded solvency problems. The urge to spend Tesla’s cash to buy back shares seems to largely come from shareholders who are less interested in long term and more interested in shoring up the SP in the short term which is the wrong reason to buy shares back.

They bought Bitcoin, so it makes sense that they would make an even better investment and buy TSLA in the 600s or lower. But it's a moot point if they have to announce the buyback, since the announcement would most likely increase the price substantially above $700.

 

[Ogre]

They bought Bitcoin, so it makes sense that they would make an even better investment and buy TSLA in the 600s or lower. But it's a moot point if they have to announce the buyback, since the announcement would most likely increase the price substantially above $700.

They can sell Bitcoin and buy raw materials with the funds. Once they buy back shares they have to reissue them and have a secondary offering to get more cash.

Not the same at all.

 

[Words of HABIT]

Has anyone released the email to executives regarding the "super bad feeling about the economy" ?

@elasalle, to be clear Reuters has quoted Elon in an internal email only the following "super bad feeling"
"about the economy" was added by Reuters, not Elon. Was Elon referencing the economy? Was it something else? When did he release his email? We simply do not know the details and Reuters is being willfully blind in not providing any additional context. We can't assume anything. Not to you in particular, however even on this TMC thread there has been a slew of misquoting of what Elon said, and now we have misquoting of what Reuters wrote of what Elon said. Words matter. I've linked the Reuters article. Although they have updated the body of the article stating Elon's clarification on proposed job cuts to only apply to Salaried Workers, Reuters is too weak to change their clickbate title.

Reactions: Elon Musk's 'super bad feeling' about the economy

Tesla Chief Executive Elon Musk told top managers he had a "super bad feeling" about the economy and that the electric carmaker needed to cut staff by about 10%, according to an internal email seen by Reuters.

www.reuters.com