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GM initiates $10B share buyback & updates 2023 guidance to boost Wall Street’s confidence

(Credit: General Motors)

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General Motors (GM) is taking bold moves to regain Wall Street’s confidence after weeks of strikes and negotiating with the United Auto Workers (UAW) union. The legacy automaker is ensuring it kicks off the new year with a few investor-focused initiatives. 

Coming straight from the negotiating table to the accounting table, GM CEO Mary Barra shared that the company is finalizing a budget for 2024, considering the contents of GM’s agreement with the UAW. Barra stated that the finalized budgies would “fully offset the incremental costs of our new labor agreements, and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs.”

GM Share Buyback Plan

General Motors intended to initiate an accelerated $10 billion share buyback plan executed by Bank of America, Goldman Sachs, Barclays, and Citibank. The total number of shares repurchased will be determined at the end of the program. The $10 billion share buyback will start in the fourth quarter. 

The auto company will receive and retire $6.8 billion worth of common stock. GM predicts it will have $1.4 billion of capacity remaining under its share repurchase authorization that it will use for “additional, opportunistic share repurchases.”

Besides rolling out a massive share repurchase program, General Motors is also increasing its quarterly dividend in 2024. GM aims to increase quarterly dividend by 33% to 12% per share.

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GM 2023 Guidance

General Motors is rolling with the punches as it closes the year by reinstating its 2023 guidance. The automaker initially pulled its guidance after publishing its Q3 2023 report, mentioning the UAW strike. 

“Because of this uncertainty, we’ve chosen to withdraw our 2023 full-year guidance metrics, even though our strong underlying business fundamentals were pushing us towards the upper half of the range prior to any strike impact,” GM CFO Paul Jacobson

The Detroit automaker believes its 2023 capital spending will be between $11.0 and $11.5 billion, down from the $11 and $12 billion estimate before the strike. The company’s 2023 capital spending estimates are primarily driven by some new product delays and a pullback on some investments related to electric vehicles. 

GM’s updated 2023 guidance also includes the following: 

  • Net income attributable to stockholders is $9.1 billion to $9.7 billion, compared to a previous outlook of $9.3 billion to $10.7 billion.
  • Adjusted EBIT of $11.7 billion to $12.7 billion, compared to the previous outlook of $12.0 billion to $14.0 billion.
  • Adjusted earnings per share are roughly $7.20 to $7.70, including the stock buyback, compared to the previous outlook of $7.15 to $8.15.
  • EPS in the $6.52 to $7.02 range, including the stock buyback, compared to the previous outlook of $6.54 to $7.54
  • Adjusted automotive free cash flow of $10.5 billion to $11.5 billion, compared to the previous outlook of $7.0 billion to $9.0 billion
  • Net automotive cash provided by operating activities of $19.5 billion to $21.0 billion, compared to the previous outlook of $17.4 billion to $20.4 billion

The Teslarati team would appreciate hearing from you. If you have any tips, contact me at maria@teslarati.com or via X @Writer_01001101.

Maria--aka "M"-- is an experienced writer and book editor. She's written about several topics including health, tech, and politics. As a book editor, she's worked with authors who write Sci-Fi, Romance, and Dark Fantasy. M loves hearing from TESLARATI readers. If you have any tips or article ideas, contact her at maria@teslarati.com or via X, @Writer_01001101.

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These Tesla, X, and xAI engineers were just poached by OpenAI

The news is the latest in an ongoing feud between Elon Musk and the Sam Altman-run firm OpenAI.

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Credit: OpenAI | YouTube

OpenAI, the xAI competitor for which Elon Musk previously served as a boardmember and helped to co-found, has reportedly poached high-level engineers from Tesla, along with others from xAI, X, and still others.

On Tuesday, Wired reported that OpenAI hired four high-level engineers from Tesla, xAI, and X, as seen in an internal Slack message sent by co-founder Greg Brockman. The engineers include Tesla Vice President of Software Engineering David Lau, X and xAI’s head of infrastructure engineering Uday Ruddarraju, and fellow xAI infrastructure engineer Mike Dalton. The hiring spree also included Angela Fan, an AI researcher from Meta.

“We’re excited to welcome these new members to our scaling team,” said Hannah Wong, an OpenAI spokesperson. “Our approach is to continue building and bringing together world-class infrastructure, research, and product teams to accelerate our mission and deliver the benefits of AI to hundreds of millions of people.”

Lau has been in his position as Tesla’s VP of Software Engineering since 2017, after previously working for the company’s firmware, platforms, and system integration divisions.

“It has become incredibly clear to me that accelerating progress towards safe, well-aligned artificial general intelligence is the most rewarding mission I could imagine for the next chapter of my career,” Lau said in a statement to Wired.

READ MORE ON OPENAI: Elon Musk’s OpenAI lawsuit clears hurdle as trial looms

At xAI, Ruddarraju and Dalton both played a large role in developing the Colossus supercomputer, which is comprised of over 200,000 GPUs. One of the major ongoing projects at OpenAI is the company’s Stargate program,

“Infrastructure is where research meets reality, and OpenAI has already demonstrated this successfully,” Ruddarraju told Wired in another statement. “Stargate, in particular, is an infrastructure moonshot that perfectly matches the ambitious, systems-level challenges I love taking on.”

Elon Musk is currently in the process of suing OpenAI for shifting toward a for-profit model, as well as for accepting an investment of billions of dollars from Microsoft. OpenAI retaliated with a counterlawsuit, in which it alleges that Musk is interfering with the company’s business and engaging in unfair competition practices.

Elon Musk confirms Grok 4 launch on July 9 with livestream event

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SpaceX share sale expected to back $400 billion valuation

The new SpaceX valuation would represent yet another record-high as far as privately-held companies in the U.S. go.

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A new report this week suggests that Elon Musk-led rocket company SpaceX is considering an insider share sale that would value the company at $400 billion.

SpaceX is set to launch a primary fundraising round and sell a small number of new shares to investors, according to the report from Bloomberg, which cited people familiar with the matter who asked to remain anonymous due to the information not yet being public. Additionally, the company would sell shares from employees and early investors in a follow-up round, while the primary round would determine the price for the secondary round.

The valuation would represent the largest in history from a privately-owned company in the U.S., surpassing SpaceX’s previous record of $350 billion after a share buyback in December. Rivaling company valuations include ByteDance, the parent company of TikTok, as well as OpenAI.

Bloomberg went on to say that a SpaceX representative didn’t respond to a request for comment at the time of publishing. The publication also notes that the details of such a deal could still change, especially depending on interest from the insider sellers and share buyers.

READ MORE ON SPACEX: SpaceX to decommission Dragon spacecraft in response to Pres. Trump war of words with Elon Musk

SpaceX’s valuation comes from a few different key factors, especially including the continued expansion of the company’s Starlink satellite internet company. According to the report, Starlink accounts for over half of the company’s yearly revenue. Meanwhile, the company produced its 10 millionth Starlink kit last month.

The company also continues to develop its Starship reusable rocket program, despite the company experiencing an explosion of the rocket on the test stand in Texas last month.

The company has also launched payloads for a number of companies and government contracts. In recent weeks, SpaceX launched Axiom’s Ax-4 mission, sending four astronauts to the International Space Station (ISS) for a 14-day stay to work on around 60 scientific experiments. The mission was launched using the SpaceX Falcon 9 rocket and a new Crew Dragon capsule, while the research is expected to span a range of fields including biology, material and physical sciences, and demonstrations of specialized technology.

SpaceX secures FAA approval for 25 annual Starship launches

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Tesla Giga Texas continues to pile up with Cybercab castings

Tesla sure is gathering a lot of Cybercab components around the Giga Texas complex.

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Credit: @JoeTegtmeyer/X

Tesla may be extremely tight-lipped about the new affordable models that it was expected to start producing in the first half of the year, but the company sure is gathering a lot of Cybercab castings around the Giga Texas complex. This is, at least, as per recent images taken of the facility. 

Cybercab castings galore

As per longtime drone operator Joe Tegtmeyer, who has been chronicling the developments around the Giga Texas complex for several years now, the electric vehicle maker seems to be gathering hundreds of Cybercab castings around the factory. 

Based on observations from industry watchers, the drone operator appears to have captured images of about 180 front and 180 rear Cybercab castings in his recent photos.

Considering the number of castings that were spotted around Giga Texas, it would appear that Tesla may indeed be preparing for the vehicle’s start of trial production sometime later this year. Interestingly enough, large numbers of Cybercab castings have been spotted around the Giga Texas complex in the past few months.

Cybercab production

The Cybercab is expected to be Tesla’s first vehicle that will adopt the company’s “unboxed” process. As per Tesla’s previous update letters, volume production of the Cybercab should start in 2026. So far, prototypes of the Cybercab have been spotted testing around Giga Texas, and expectations are high that the vehicle’s initial trial production should start this year. 

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With the start of Tesla’s dedicated Robotaxi service around Austin, it might only be a matter of time before the Cybercab starts being tested on public roads as well. When this happens, it would be very difficult to deny the fact that Tesla really does have a safe, working autonomous driving system, and it has the perfect vehicle for it, too.

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