The level is being set for Tesla to conduct its first percentage buyback in the company’s history, with Chief Executive Elon Musk indicating the percentages were undervalued.
On Wednesday night, he told analysts on the company’s third-quarter earnings call that the company was following “the right procedure to make a buyback” between $5 billion and $10 billion.
Speculation was first settled last week after a major shareholder tweeted that Tesla needed to buy back shares to increase its price, to which Musk responded that he “pointed out. “
It doubled on Wednesday, telling analysts that “we will be doing significant buybacks. Even if next year will be a very complicated year, we still have the opportunity to buy back between $5 billion and $10 billion. “
If Tesla decides to buy shares at the end of Musk’s estimate, that would equate to more than 46 million shares.
Companies launch buyback systems when they need to implement excess liquidity, seek to generate more favorable profits consistent with a consistent percentage through significant cuts consistent with percentages, or show that they believe stocks are undervalued.
In Tesla’s case, the company is still spending heavily on capital projects and vehicle development, while its earnings consistent with average percentage beat expectations in the third quarter. But valuation is on Musk’s mind.
On Wednesday, he presented an exorbitant forecast for the company’s valuation and said he saw “the prospective path for Tesla to outweigh Apple and Saudi Aramco combined. “
This situation would bring Tesla’s market capitalization to more than $4 trillion, making it the largest company in the world by this key metric.
Meanwhile, Tesla’s current market capitalization recently fell below $700 billion, and the stock fell 50% from November’s all-time highs.