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Tesla (TSLA) is taking a beating; investors ask board to stop the bleeding

Tesla’s stock (TSLA) is currently taking a beating on the public market, and thousands of investors are now asking the company’s board to act to stop the bleeding.

While the overall stock market has seen a downturn over the last few months, there’s no doubt that Tesla has had it harder than most.

The automaker’s stock appears to have lost momentum, and Tesla CEO Elon Musk selling tens of billions of dollars’ worth of shares over the last year did not help.

Today, Tesla’s stock dropped almost 7%, which is a significant drop for a company of that size.

Over the last three months, Tesla has seen its valuation fall from nearly $1 trillion to close to $500 billion:

The company lost roughly half of its value over a relatively short period of time.

Now Tesla investors are asking the company’s board of directors to act to stop the bleeding with a share-buyback program.

A share-buyback program consists of a company buying its own shares at the market price. It’s generally a sign that the company believes its stock is undervalued and is a way to boost the stock price by taking some outstanding shares off the market.

Last month, Musk said that Tesla’s board was seriously considering a buyback program between $5 and $10 billion, but it is still up to the board to move forward with it – and it still hasn’t.

Top comment by citizenjs

Liked by 87 people

If I was a Tesla stock holder, I would prefer to see the company invest an extra $5-10 billion into something productive. In this context, a stock buyback really feels like an admission of weakness.

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Now a petition started by Alexandra Merz is accumulating an impressive number of signatures from retail investors asking Tesla’s board to implement a share-buyback program.

Merz wrote in the petition:

Retail investors in Tesla stock would like the Board of Tesla Inc. to consider Share Buybacks at the earliest convenience, to use the remaining six weeks of 2022.  The current stock price represents an excellent opportunity to buy a greatly undervalued stock.

The petition lists four main reasons for going forward with the program now:

  • Benefit from a currently very unvalued stock price
  • Show confidence in Tesla’s future results
  • Act before the 1% tax on share buybacks becomes applicable on January 1, 2023
  • Operate the buyback under current SEC rules, which will change reporting standards in the foreseeable future

The petition has already accumulated over 4,000 signatures, which should likely get the attention of the board.

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