A funny thing happened on the way to a Twitter purchase.........(share buybacks, Uncle Leo, Cathy Wood, Jack Dorsey, and other weekly breadcrumbs)
While Friday's closing share price hitting a new 52-week low of just under $205/share represents a new emotional low for many TSLA Longs witnessing the growing disconnect between TSLA share price and Tesla's performance as a company, it was likely met with great enthusiasm by many not wishing to see Elon purchase Twitter. And with so much FUD in the face of record earnings and path to orbit for TSLA it is fair to ask if the beat down of the stock price since the TWTR purchase announcement hasn't been pummeled in-part by Big Money that would much prefer to see the purchase effort unwind instead of go through. The week held so much more with comments from Uncle Leo, and Aunt Cathy, and red-headed step child Gary Black, and so many others on WS and main street that it should feed an interesting weekend of reflection...........and speculation.
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But looking forward first requires looking backwards. Following Elon's sale of TSLA stock near the ATH to pay taxes, he sold another 7.92 million shares for approximately $7 Billion (roughly $883/share) for his outright TWTR purchase efforts. I am still not certain after following Fred's take on this on Electrek and the perspective of others if these funds were independent of the funds Elon used for acquiring his 73.5 million shares for a 9.2% stake in TWTR - meaning he may have purchased those TWTR shares with funds from his previous tax sale and/or other sources (hoping someone here can illuminate which pile of money Elon bought his TWTR shares with). But it appears Elon acquired TWTR when the share price was roughly $40/share, so the purchase of those shares was just under $3B. And at the current price of TWTR, that 'investment' is worth about $700,000,000 more than he purchased it for. About 25% more while everything else is down 50%. Not a bad investment! And whether TWTR share price has stayed high because of Elon's desire to purchase it, or possibly because those not wanting him to purchase it have artificially increased the share price to make that purchase even more difficult, the result is still an extra $700,000,000 in Elon's pocket that could help fuel an unexpected twist.
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At the same time that Cathy Wood discussed the possibility of Elon and Jack Dorsey are perhaps working more closely together during her Yahoo interview this last week, our friend Uncle Leo (Koguon) made a very public Twitter request to Elon for Tesla to make a TSLA share buyback of biblical proportions at these current share prices. And despite Uncle Leo insisting on Twitter back in May 2022 that a share buyback would have a much greater impact on TSLA share price than Gary Black believed it would, Gary didn't waste any time this week with a similar request to Tesla itself. And for me, here is were it really gets interesting.............even before discussing the idea of Tesla being the buyer of those TSLA shares.
Elon's $7 Billion sale of 7.92 million shares at $883/share should now be split adjusted 23.76 million shares at $205/share.................and those shares are now only worth about $4.9 Billion. That would mean that Elon could purchase back all of the shares he sold earlier this year to purchase TWTR and have $2.1 Billion remaining from that sale. So from the perspective of a buyback on Elon's part, the significantly reduced TSLA share price leaves Elon in a position of regaining all his original shares plus retaining a considerable amount of remaining capital to begin a new venture with.
Enter the re-kindled talk of Elon and Jack Dorsey working together. Over the past 6 months it has been speculated on TMC, on Twitter, and even by Elon himself that an effort to create a platform similar to Twitter would cost from $40 million - $400 million...............if he had the right people around him. Cathy's message this last week is that he already has the right people (Jack). But is that in the context of a purchase of Twitter or of a new platform? Regardless, Elon is sitting on a potential $2.1 Billion after buying all his shares back. Which creates the the further possibility that Elon could buy back his 23.76 million shares and still have $700,000 million remaining after paying the $1 Billion fee for backing out of TWTR, and after investing in a new venture costing up to $400 million if he went that route instead. And he potentially could add an additional $700,000 million to that war chest by dumping his 9.2% stake in TWTR at current prices if those shares were purchased outside of his $7 Billion share sale. That's a whopping $1.4 Billion off-ramp to the positive for Elon at the moment.......................and it represents the TSLA Float being reduced by 23.76 Million shares in the process.
The ultimate irony
Let's assume that it is within the realm of possibilities that those not wishing for Elon to purchase TWTR have worked to keep the TWTR share price up while they have hammered the TSLA share price lower since this all began. Not too much of a stretch IMO with headline stories on MSN this week of Tesla EVs floating in the Florida hurricane flood waters bursting into flames everywhere as one possible example. But ironically, we have now arrived at the place where those that may have tried to prevent Elon from further influencing social media through a purchase of Twitter may have unknowingly provided him with all the capital monies necessary to begin his own social media platform, and all the publicity necessary to do it........................while leaving Elon with up to an extra $1.4 Billion after he buys all his shares back, and after he starts the new social media platform with Jack Dorsey. Yes, from a 50,000 foot view this is all getting much more interesting no matter how it turns out. And we didn't even discuss Tesla buying back any shares with their massive war chest yet either. That could lead to some unexpectedly serious compounded interest for Tesla and for TSLA Longs if it was on Elon's 3-D chess board at the moment.
So, you're finding the best use of your life and time on the planet is to be on a fan site with an axe to grind on a guy leading a team to build a sustainable future for the planet (that you live on), make life multiplanetary, building a worldwide internet, and curing brain diseases?
