With Tesla ending the third quarter on strong financial footing and with TSLA stock currently feeling pressure from Elon Musk’s “Twitter overhang,” retail shareholders have banded together to request the electric vehicle maker to initiate a share buyback. As of writing, the Tesla retail shareholders’ petition has gathered over 3,600 signatures.
Numerous high-profile Tesla bulls have called on Elon Musk to initiate a buyback of Tesla stock. These include Leo KoGuan, who is believed to be the third largest individual TSLA shareholder, as well as Gary Black, a Wall Street veteran and the Managing Partner of The Future Fund LLC, whose largest holding is TSLA.
Elon Musk noted during the third quarter earnings call that Tesla is open to initiating a share buyback. According to the CEO, pretty much everyone on Tesla’s board has received questions about the topic. Musk also noted that a share buyback is certainly possible, even in the downside scenario next year.
“We’ve debated the buyback idea extensively at the board level. The board generally thinks that it makes sense to do a buyback. But we want to work through the right process to do a buyback, but it’s certainly possible for us to do a buyback on the order of $5 billion to $10 billion. Even in the downside scenario next year, even if next year is — was a very difficult year, we still have the ability to do a $5 billion to $10 billion buyback,” Musk said.
As noted by retail Tesla shareholder Alexandra Merz in the TSLA stockholders’ Change.org petition, the time is right for the company to do a share buyback now, or hopefully in the remaining weeks of 2022. The Tesla shareholder listed several reasons for this, such as the company benefiting from a very unvalued TSLA stock price. Tesla could also show confidence in its future results, while avoiding a 1% tax on share buybacks that become applicable on January 1, 2023.
The Tesla shareholders’ petition has gained significant ground, with new signups being recorded on Change.org until this writing. A total of 3,658 people have signed up in the past three days so far. Elon Musk, for his part, previously noted earlier this month that a share buyback is completely up to Tesla’s board. Hopefully, the Tesla board will listen to the voice of its retail shareholders this time, considering their growing voice.
Those who wish to sign up for the petition to push for a TSLA share buyback can click here.
Disclaimer: I am long Tesla.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.