Elon Musk told Tesla investors yesterday that he won’t sell more Tesla stock in the next two years and that his recent stock sale is only to prepare for a potential recession.
Tesla
No more stock sales
In a Twitter Spaces audio chat yesterday, Elon Musk said, “I’m not selling any stock for at least the next 18 to 24 months, so you can expect me not to sell the stock until 2025. I need to sell some stock (before) to make sure I have backup capital for the worst-case scenario.”
This isn’t the first time Elon Musk has promised not to sell more Tesla stock this year. In August, after selling more than $8 billion worth of Tesla stock to fund the Twitter acquisition deal, Elon Musk tweeted, “No further plans to sell Tesla after today.” Earlier this month, however, he sold another $3.6 billion in Tesla stock. By yesterday’s close, the stock had fallen to a 52-week low.
Elon Musk
Elon Musk, meanwhile, also offered his own take on the macroeconomy, expressing pessimism about the overall economic outlook for the year ahead. “From a long-term perspective, this is a natural economic cycle, and frankly, we’re long overdue for a recession,” he said, adding, “Shockingly, we haven’t experienced any major recession since 2009.”
Still focused on Tesla
Some investors fear that Elon Musk has moved away from his role as CEO of Tesla as he shifts his focus to Twitter, further contributing to the decline in Tesla’s stock price. Elon Musk, however, said he has “not missed a single important meeting” at Tesla since taking the helm of Twitter. He told listeners in a Twitter Spaces chat that he sold Tesla shares because he was “a little paranoid and went through two really bad recessions.
Stock buyback
Elon Musk also said Tesla’s decision on a stock buyback program could depend on the severity of the recession. “Are we talking about a mild recession, a moderate recession or a severe recession? We don’t know yet.” He said.
In October, Elon Musk said Tesla could make $5 billion to $10 billion in stock buybacks and said it was likely to make meaningful buybacks. The company has discussed such stock buybacks at the board level, but has not yet approved the plan, he said.
“The board is very open to stock buybacks,” Elon Musk said in the chat. He added, however, that “it would not be wise to do a buyback and then find that the recession is worse than it was in 2009.”
New super factory
Elon Musk revealed that Tesla is close to finalizing the site for another superfactory, but did not disclose details.
Elon Musk has said that Tesla could open 10 to 12 new factories to help increase Tesla’s sales to 20 million units by 2030.
He also said Tesla plans to start refining battery-grade lithium at a plant in Corpus Christi, Texas, in about two years to help the company meet its demand for the material it needs for power batteries.
Tesla shares fell another 8.88 percent yesterday. In response to investors’ concerns, Elon Musk said, “The company’s ability to actually execute is excellent.”
