With the global economic downturn, companies are resorting to buybacks amid losses.
Leo Koguan, who refers to himself as the third-largest individual shareholder of Tesla Inc (NASDAQ: TSLA), has called on the EV company to announce a stock buyback with immediate effect. Companies explore the stock buyback options in order to raise capital for shareholders by using cash to buy their own shares in the open market. A lot of US leading companies repurchased many of their own stocks in 2021. In the year, buybacks reached a record high of $850 billion, with participation from Apple Inc (NASDAQ: AAPL) which equally did a lot of buybacks among other publicly-traded companies. Alphabet Inc (NASDAQ: GOOG) and Meta Platforms Inc (NASDAQ: FB) also announced buybacks last year. More recently, Alphabet announced buybacks worth $70 billion in April 2022.
Tesla shareholders are evidently not making profits as the company has declined nearly 33% since 2022 began. Koguan issued his statement on the Tesla stock buyback amid the continuous losses.
Tesla Whale Says Tesla Must Immediately Announce Stock Buyback
Koguan said in a tweet to the Head of Investor Relations at Twitter, Martin Viecha, that Tesla must swiftly announce a $5 billion worth of stock buyback.
“Tesla must announce immediately and buy back $5 billion of Tesla shares from its free cash flow this year and $10 billion from its free cash flow this year and $10 billion from its free cash flow next year, without effecting its existing $18 billion cash reserves with ZERO debt,” wrote he.
Tesla has shed 19% in the last three months in addition to the YTD loss. The company’s stock also plunged 29.64% over the past month and another 2.50% in the last five days. Tesla is down 1.85% to $696.00 in premarket trading at press time. The company’s CEO is a force in the business world, overseeing top firms. Now, the businessman has offered one of the most popular social media companies globally, Twitter Inc (NYSE: TWTR). However, he has suspended his offer under the claim that Twitter is not truthful with its report on fake or bots accounts. Musk even called on the US SEC to investigate the social network service provider.
With the global economic downturn, companies are resorting to buybacks amid losses. Galaxy Digital (TSE: GLXY) said in a press release that its Board of Directors has approved the stock buyback program. The company plans to buy back 10%, representing 10.6 million of its outstanding shares. The official announcement says that the buyback program will serve the company whenever it believes that the current market prices do not portray its intrinsic value.
Alibaba Group Holding also increased its share buyback by two-thirds from $15 million to $25 billion. The buyback is scheduled to run for two years, beginning last March till March 2024.
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