Tesla CEO Elon Musk is trying to buy Twitter and manage multiple companies at the same time.
James Glover II | Reuters
Billionaire Leo Koguan, who claims to be the third largest individual shareholder of Tesla shares, is calling on the automaker to announce a $15 billion share buyback as the company’s share price continues to fall.
In a tweet With Martin Viecha, Tesla’s senior director of investor relations, Koguan said the company should immediately announce that it plans to buy back $5 billion in Tesla stock this year and $10 billion next year. . He added that Tesla should use its free cash flow to fund the acquisition and that it would not affect its existing $18 billion cash reserve. Tesla did not immediately respond to CNBC’s request for comment.
Tesla shares closed down more than 6% on Wednesday amid a widespread market sell-off. The company’s shares have fallen more than 30% this year.
Share buybacks – when a public company uses cash to buy its own shares on the open market – is a method companies use to try to return capital to shareholders.
Buybacks rise to record high of $850 billion in 2021. In year, Apple bought back more of its own stock than any other public company, followed by Alphabet And after that Meta. Alphabet announced buy back another 70 billion dollars last month.
Koguan “bets the house” on Tesla very early in the coronavirus pandemic, according to Forbes reports from October say he has made billions of dollars from his long-term investment in the electric vehicle maker. Koguan is said to have joined Tesla after selling his shares in other companies such as Baidu, Nvidia, Chinese phone and Nio.
Koguan said: “I consider myself a fanboy of Elon. “I can say that he’s the only person I truly respect on Earth.”
Musk, the world’s richest man, said on Tuesday that he has put his deal with Twitter on hold until he has more information about the number of fake or spam accounts on the social network.
Analysts at Jefferies said on Tuesday that Musk looks to be trying to lower prices due to the recent market sell-off.
“Elon Musk’s recent comments suggest he’s trying to negotiate a lower asking price,” equity analyst Brent Thill and equity associate James Heaney said in a research note.
“We believe Musk is using his investigation of the fake % of TWTR accounts as an excuse to pay less than $54.20 per share. In fact, NASDAQ COMP 25% reduction compared to the beginning of the year [year-to-date] and Elon Musk realized he might be paying too much for the property. “CNBC has reached out to Tesla in response to comments but has not received a response.
Wedbush analyst and Tesla investor Dan Ives told CNBC on Wednesday that Musk’s planned acquisition of Twitter is a “big upside” for Tesla stock.
Ives, who says he has been following Musk for decades, said Musk has developed a “black eye” in the past few weeks.
“The way he’s handled this is, I believe, without a conscience,” Ives said, adding that it “left a bit of a stain” on Tesla’s stock.
