(A new consideration I haven't seen in the many, many, many posts on whether Tesla should issue a share buyback).
In all the posts advocating FOR a share buyback, the assumption is that Tesla sitting on cash is a "pure waste" (
@TSLA Pilot ,
@WarpedOne , and others). Surely Tesla doesn't have $18 B sitting under a mattress somewhere!?! Wouldn't they at least have it
invested in fixed, short-term bonds or investment certificates at 3%, 4% even 5%, no?
If this is the case, then not only is the cash hoard a prudent mitigation against the risk from many possible albeit unlikely disasters documented by
@unk45,
@Gigapress, and others, it's also growing as a
hedge against inflation. So not really a waste after all, just basically staying on par, not gaining, but not significantly losing either. Issuing a buyback becomes a matter of how
greedy Tesla / the Master of Coin is (and just make your way over to the
Options thread to hear how well that's going for our friends suffering through this unexpected ["unlikely"?] downturn.)
I'm sure any of the capable accountant-types on the forum will correct me if such investments would show up on the balance sheet separate from cash. And if so, then really I'm proposing a third option between sitting on cash or a share buyback:
- Option 3 - invest in laddered fixed income.