Tesla CEO Elon Musk discussed the possibility of the company conducting share buybacks on the recent earnings call. Musk said that Tesla could potentially allocate between $5bn and $10bn to buybacks, subject to board approval. Musk also noted that the buybacks would make sense as Tesla was bringing in $3bn in cash flow each quarter. Musk also said that he thinks Tesla can have a market cap larger than Apple and Saudi Aramco combined, potentially reaching $15bn. However, some analysts noted that Musk sounded tired and exasperated during the call.
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Sam in Traffic
How’s it going everyone it’s Sam just sitting here in traffic, have the car on autopilot uh but I was listening to Tesla earnings and there are a couple important things.
Share BuyBacks
First of all, Johan was talking about share BuyBacks. Sounds like that is going to go through assuming Board approval. Now he threw five to ten billion dollars out there, that’s still a pretty small relative size to the market cap, maybe one to two percent of their overall shares. But they are bringing three billion dollars in cash flow a quarter right now, so it does make sense in their mind to throw a little bit money at share BuyBacks. Now, maybe that changes, maybe Tesla shoots up over the next couple months and then maybe they decide not to go with a buyback, but at this point it sounds like it’s on the table.
Market Cap
Number two, he talks about how their market cap is, you know, it’s large, but he thinks they can get well above Apple’s and Saudi Aramco’s. Now, if you haven’t heard them, I’ll be honest, I didn’t know how big they were. They’re seven plus trillion dollars. So he said he thinks they can be bigger than them combined. So, they’re talking about 10 trillion dollars. Then he went on to say that he thinks it could be worth double Saudi Aramco, so 15 billion dollars. He thinks that’s a possibility. That is essentially a 20 to 30 times from here, huge market cap.
Elon’s Fatigue
Third of all, it’s something that’s not so positive. I’m not sure exactly how to read into this, but Elon sounded really tired or just maybe exasperated on this call. Maybe it’s because the stock went down and he thinks that they’re still executing really well and compared to every other company, they are right. They’re blowing out revenue. They’re up at 56 percent year over year. They’re still industry-leading margins. Maybe he’s just sick of everyone that is giving him a hard time when they are still crushing it and the stock’s still down. Maybe it’s that he really is tired. Maybe he got a bad night’s sleep. Maybe he has a cold. You know, we don’t know, but I just wanted to say that because it was something I thought was pretty apparent. He sounded pretty tired on the call.
In conclusion, let me know your thoughts about this underneath the video and I’ll see you in the next one. Bye.
