Any company management that chooses to prop up share price with precious cash during a time of great uncertainty on multiple fronts (War in europe with a cornered Putin / potential CV mutations / China Covid Zero policy and china citizens housing asset bubble bursting / Taiwan / Rampant Inflation and associated rising interest rates as a possible recession driver) just to please disgruntled shareholders who have in recent years enjoyed 10-100x gains….I sure hope tesla management are not of that variety.Ĭlick to expand.The professional seismologists at the US Geological Survey who have expertise with the geology and seismic risk in the San Fransisco Bay Area are saying stuff that does not make it sound to me like building codes are adequate to prepare the East Bay for the next Big One from the Hayward fault, a "tectonic time bomb" ready to release a "powerful, damaging earthquake.at any time". I hope you are right, I definitely hope they don’t do one this year.ĥ.
This is in addition to the growing capital expenditure now hitting as it builds the massive amounts of 4680 lines, the cybertruck production line, the semi line, expanding Nevada, and starts work soon on at least one new factory (probably more than one given they have a new site ready to go in Shanghai)Ĥ. Shanghai output is ~$5 Billion per month now for example - another long covid enforced shutdown would increase working capital requirements. Teslas working capital requirement needs are going to skyrocket in the immediate future as its production rate continues to rise dramatically. They always kept a massive amount of cash on hand (it took them 5 years of buyback activity to take their net cash under $100 Billion, and even today they still have $179 Billion cash on hand)ģ. The only reason Apple borrowed to perform their buyback was due to the fact its $200 Billion in cash was mostly held offshore and it would have been taxed heavily to repatriate it for the buyback. $3-$5 Billion over an extended timeframe wouldn’t even cover the dilution from employee grants, the share count would continue higher under that plan.Ģ. But as much as some of us would like to see it, I don't see Elon caving into this small amount of pressure.Įdit: ninja'ed by Dodger, to expand.1. And I expect there are employees who would like to see it happen also. There is growing pressure from retail investors and PMs such as Gary Black. The one caveat to #2 above is any pressure coming from investors, employees and/or the board to shore up the stock price.I don't see him taking whatever small amount of risk there is just to shore up the stock price. This, coupled with the current macro and geo-political environment, gives Elon every incentive to be financially conservative and hoard cash. I'm sure Elon still remembers the stress and pain of that time. We all know how close Tesla came to bankruptcy just a few short years ago. While I would like to see it, I am 99% confident they won't this year.Clearly, this will factor into the decision. I am curious as to how low the cash balance gets at the lowest. I appreciate and agree with the POV that cash balance at end of quarter is higher than it during the rest of the quarter.Just use a small percentage of operating cash flow. I'm leaning towards not taking down debt. I'm torn between taking down some debt to do this, a la Apple.Something like, 'up to $5B over the next 3 years.' That amount and timeframe would give Zach and Elon a lot of flexibility. And it should be open-ended as to when, leaving Zach the option to not even buy back shares until cash balance is higher. Just enough to signal to the street (including shorts and hedgies). I would like to see Tesla announce a buyback.On the topic of share buyback, here are my thoughts:
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