TSLA buyback / dividends

[Buckminster]

Elon mentioned that this was a real possibility at the annual shareholders.

Musk, who is also the CEO of SpaceX, said he “wouldn’t want to commit” to Tesla share buybacks just yet, and that a force majeure event somewhere could change the equation. However, he reiterated that if Tesla’s future cashflow is looking solid, and the world is “relatively stable,” then a “share buyback is on the table.”

 

[glide]

Elon mentioned that this was a real possibility at the annual shareholders.

Elon also mentioned my car had a center-horn.

 

[Buckminster]

https://twitter.com/x/status/1580573359603322881

 

[Buckminster]

$5Bn to $10Bn likely in 2023.

 

[mongo]

$5Bn to $10Bn likely in 2023.

FWIW, that's 1-2 tranches of Elon's 2018 CEO plan at current prices. It executes on or before Jan 20, 2028.

 

[Buckminster]

https://twitter.com/x/status/1592167509222129665

 

[MikeC]

I’m wondering what a buy back would look like at this point. Would they announce it before they start? I would love to find out they’ve been buying since the 170s last week.

 

[mongo]

I’m wondering what a buy back would look like at this point. Would they announce it before they start? I would love to find out they’ve been buying since the 170s last week.

They've already announced as much as they need to. No reason to advertise execution and have people front run it. Need to report quarterly, I believe?

 

[MikeC]

They've already announced as much as they need to. No reason to advertise execution and have people front run it. Need to report quarterly, I believe?

So they could potentially have been buying last week and today. That would be awesome.

I wonder if Elon choosing to reply and saying it’s up to the board might be a hint that it’s already happening. Maybe that would explain the silence about TSLA - he is purposely not doing anything to spike the price while the company buys.

 

[Buckminster]

I don't think it's been mentioned here, but Emmet Peppers went to the Tesla Semi event and he was prodding around trying to find information about the share buyback (youtube video listed below). It wasn't directly told to him, but he inferred from the answers (and non-answers) he received that Elon is 100% completely fine with the share buyback, as he has stated on Twitter. Thus, as Elon also stated on Twitter, the board is the one that is hesitant to green light the share buyback, but the most interesting thing Emmet inferred from what was said to him was that the reason for the board's hesitancy is because institutional investors are telling the board not to do the share buyback.

If this is true, here are some points I'd like to make:

1. Contrary to the beliefs of many on social media, including here on TMC, the Tesla Board IS actively looking in the best interests of it's shareholders. It just so happens that institutional investors have a much stronger and persuasive voice than retail investors (most likely due to them owning more shares than retail I'm guessing?)
2. Why do institutional investors not want the buyback to happen? There are two possibilities I can think of. The first is that having less cash on hand could be an added risk to the company that institutional investors prefer not to take. The second is that it might be possible that institutional investors are interested in still being able to get shares on the cheap while they're able to.

Note that there are also some other takeaways from the rest of the youtube video related to Cybertruck that I thought were interesting as well, so it's probably worth listening to the whole video. It seems that the Cybertruck project is called 'Project Everest' and Tesla has told it's suppliers to delay 4 months for it's production. This causes Matt to believe that very few cybertrucks will be produced next year, and that Cybertruck production will most begin around Q4.

 

[mongo]

Happy 12/9 day

 

[Buckminster]

https://twitter.com/x/status/1606003498344386560

 

[Buckminster]

I'd like to discuss the possibility that Tesla did a share buyback during 2022 Q4. Take a look at this excerpt from the Earnings Letter:

Tesla 2022-Q4 "Cash Flows from Investing Activities"​

View attachment 901206

Notice that Tesla reported "Purchases of investments" of $4,368M in Q4, vs an average of $392M in the previous 4 quarters. This is a substantial jump in investments of over 11x.

While its true that yields on Treasury bonds did increase in Q4 (making them more attractive), let's examine another possibility: Tesla may have repurchased the ~22M shares total that it issued during the Sep 2020 and Dec 2020 Cap raises.

If that is the number of shares purchased, Tesla would only have needed to achieve a DCA of ~$195 per share on their purchases for 22M shares. Even this DCA seems high given the SP decrease, and steady Volume increase in TSLA throughout December:

View attachment 901208

However, If Tesla was able to achieve (for example) a DCA of $132/share in Q4, that would result in ~33M shares added to their treasury. And with YTD gains (actually, let's use the hypothetical DCA example of $132), then Tesla would have paper gains of ~$1.5B as of Friday.

If Tesla did purchase Treasury Shares in Q4 (that is, purchased TSLA on the Open Market, held in their Cash/equivalents Accounts), it should be reported in the 10-K (possibly this week). I'm curious to know more about the investments purchased.

Cheers to the Longs!

 

[Buckminster]

https://twitter.com/x/status/1620898014608105473

FB buybacks

 

[Buckminster]

Buffett discusses bybacks a little in latest letter just out:
https://www.berkshirehathaway.com/letters/2022ltr.pdf

Will buybacks get a mention on Wednesday?

 

[ShareLofty]

Has Uncle Leo stopped banging the drum for the buyback ever since the stock doubled in a month? I know he had a bunch of 160 puts

 

[Buckminster]

Mentioned 3:09

Still on the table

 

[traxila]

Mentioned 3:09

Still on the table

Not happening 2023.

Think 2024 IMO.

I would prefer they bank 50B before they start distributing funds. Sounds like a lot. But is it when the target is 20M cars and 1.5TW battery storage deployment seven years from now on an annual basis?

 

[jeewee3000]

Not happening 2023.

Think 2024 IMO.

I would prefer they bank 50B before they start distributing funds. Sounds like a lot. But is it when the target is 20M cars and 1.5TW battery storage deployment seven years from now on an annual basis?

I agree, and I really hope they don't do a buyback before the current economic turmoil (inflation/banks) is behind us. Yes, this will allow for less optimal buybacks than if Tesla bought $TSLA on the cheap, but Tesla should play it safe. We as investors/traders can choose to speculate. They cannot.

 

[Buckminster]

https://twitter.com/x/status/1639907016457191424