Tesla Receives Demand from Investors to Buy Back Shares Following Stock Price Plunge

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunjin Jung] Tesla, which experienced a stock price plunge due to Elon Musk CEO's Twitter acquisition attempt, has received a demand from investors for a share buyback.

On the 19th (local time), according to CNBC and others, billionaire individual investor Leo Koguan tweeted to Martin Viecha, Tesla's head of investment, expressing his opinion that Tesla should announce a $15 billion (approximately 19.2 trillion KRW) share buyback. Koguan claims to hold the third-largest stake among Tesla's individual shareholders.

Koguan emphasized that Tesla should conduct a $5 billion share buyback this year and $10 billion next year, using free cash flow rather than the $18 billion in cash reserves. He noted that Tesla's free cash flow in Q1 this year was about $2.2 billion and, considering capital expenditures, expects annual free cash flow of $8 billion this year and $17 billion next year.

This share buyback demand came after Tesla's stock price dropped significantly. Tesla's stock price fell nearly 40% in about 40 days, from $1,145.45 on April 4th, when Musk disclosed his 9.2% stake in Twitter, to $709.42 on the day of the report. Tesla has not issued any statement in response to the individual shareholder's demand.

Meanwhile, on the same day, Twitter stated that the acquisition deal itself is not on hold despite Musk's recent announcement of a pause in the acquisition, and that the contract is proceeding as planned. According to Bloomberg News, Vijaya Gadde, Twitter's Chief Legal Officer, told employees that there will be no renegotiation of Twitter's deal price, and other Twitter executives, including CEO Parag Agrawal, said they are cooperating with Musk's side.