Elon Musk says Tesla could buy back up to $10 billion in shares next year
Andrew Kelly/Reuters
- Elon Musk said Wednesday that Tesla could repurchase up to $10 billion of its shares this year.
- Some investors have called for a stock buyback as the EV maker's stock has been declining.
- Tesla stock fell 5% Thursday after it missed on earnings and warned it wouldn't meet delivery targets.
Elon Musk has hinted that Tesla could repurchase up to $10 billion worth of its shares next year, after a slide in the electric-vehicle maker's stock this year spurred calls for the move.
The Tesla CEO laid out the company's thinking Wednesday in a conference call after its third-quarter financial report, where it missed revenue targets but beat on earnings.
The Tesla board has discussed the idea of repurchasing shares extensively, and it generally thinks it makes sense, Musk said.
"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," he explained.
"Even in the downside scenario next year, even given if next year is a very difficult year, we still have the ability to do a $5 billion to $10 billion buyback."
"This is obviously pending board review and approval. So it's likely that we'll do some meaningful buyback."
Some investors have pushed for Tesla to repurchase shares after a series of stock splits and a fall of about 36% in its price this year so far. Leo Ko Guan — who claims to be the EV maker's third-largest individual shareholder — called for the move earlier in October, saying in only a buyback or a doubling in profit could break the stock's decline.
Tesla shares fell over 5% to $209.30 in premarket trading after the company said it expects to undershoot its delivery growth target for this year. It reported revenue of $21.45 billion in the third quarter, shy of the $21.96 billion analysts forecasted. But its adjusted earnings came in at $1.05 per share, versus the 99 cents expected.
The company's market cap stood at around $690 billion at market close Wednesday. Musk's bid to take over Twitter would involve his Tesla shares, one factor weighing on the share price along with the wider impact on tech stocks of the Federal Reserve's aggressive interest rate hikes and fears of a recession.