Leo KoGuan Calls for $15 Billion Tesla Buyback as Stock Continues to Struggle

Mandatory Credit: Photo by Jae C Hong/AP/Shutterstock (10473583d)Tesla CEO Elon Musk speaks before unveiling the Model Y at Tesla's design studio in Hawthorne, Calif.
Jae C Hong/AP/Shutterstock / Jae C Hong/AP/Shutterstock

Billionaire entrepreneur and investor Leo KoGuan, a self-described “fanboy” of Tesla CEO Elon Musk and the third-largest individual shareholder in the electric vehicle maker, is calling on the company to buy back $15 billion worth of stock to help reverse its recent slide on Wall Street.

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KoGuan offered the advice in a since-deleted tweet to Martin Viecha, Tesla’s senior director of investor relations, according to reports from CNBC and Teslarati.

KoGuan reportedly advised Tesla to “immediately announce” that it is planning to buy back $5 billion of company shares this year and another $10 billion next year. The Tesla whale also suggested that if the company used its free cash flow to fund the stock buyback, it wouldn’t affect the company’s $18 billion in cash reserves. 

KoGuan is the third largest individual Tesla shareholder after Elon Musk and Oracle founder Larry Ellison, Teslarati noted, citing a confirmation from Viecha. According to Bloomberg, KoGuan owned 6.31 million Tesla shares as of Sept. 2021. He also has options to buy 1.82 million more shares at a strike price well below the recent levels.

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Stock buybacks are an option publicly traded companies sometimes use to prop up their stock prices and return capital to shareholders. Tesla shares fell after market opening on May 20 (down about 5.5% as of 11 a.m. EST) after finishing slightly lower the previous session. The EV maker’s stock, which currently trades near $670, has lost nearly 40% of its value since closing above $1,145 on April 4.

That can’t be cheery news to investors like KoGuan, though he maintains a bullish outlook on the company. In addition to being one of Tesla’s largest individual shareholders, he has been among its biggest cheerleaders over the last couple of years.

“I regarded myself as Elon’s fanboy,” KoGuan told Forbes in an interview last October. “I would say he is the only person I really respect on Earth.”

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He definitely has a high regard for Tesla’s ability to generate cash flow.

In another tweet, KoGuan said that Tesla’s free cash flow amounted to $2.2 billion in the first quarter of 2022. He expects that figure to climb to $8 billion by the end of the year and $17 billion in 2023, after capital expenditures have been factored in. A follow-up tweet by KoGuan suggested that Tesla can invest in full self-driving technology, its Optimus bot and new factories while also buying back its “undervalued stocks,” CNBC noted.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

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