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Tesla's Musk Teases Up to $10B Buyback, Says Could Be Worth More than Apple and Saudi Aramco 'Combined'

Published 2022/10/20, 18:22
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By Investing.com Staff

During last night's conference call, Tesla (NASDAQ:TSLA) CEO Elon Musk said the company could do a $5-$10 billion buyback and he thinks the company could eventually be worth more than Apple (NASDAQ:AAPL) and Saudi Aramco (TADAWUL:2222) combined.

On the buyback, Musk said:

"And I think every one of our Board members has gotten questions about buybacks. The -- we've debated the buyback idea extensively at the Board level. The Board generally thinks that it makes sense to do a buyback. But we want to work through the right process to do a buyback, but it's certainly possible for us to do a buyback on the order of $5 billion to $10 billion. Even in the downside scenario next year, even given if next year is a very difficult year, we still have the ability to do a $5 billion to $10 billion buyback. This is obviously pending Board review and approval. So it's likely that we'll do some meaningful buyback."

On being worth more than Apple and Saudi Aramco combined:

"So in conclusion, while the market theme revolve around the short term, it's very important to focus on the long term. I can't emphasize this enough with investors. And I think long-time investors, obviously recognize this with Tesla. We have our sort of local ups and downs, but long-term trend has been extremely good. And several years ago I said, I think, on our earnings call, that I thought it was possible for Tesla to be worth more than Apple, which was then the highest cap company, I think, in the market. And Apple, at that time, I think was around $700 billion. And I said it required incredible execution, at least some luck.

And we didn't only achieve that. Tesla went, in fact, or passed Apple's market cap at the time. And now I am of the opinion that we can far exceed Apple's current market cap. In fact, I see a potential path with Tesla to be worth more than Apple and Saudi Aramco combined. So now that doesn't mean it will happen or that will be easy. In fact, I think it will be very difficult. It will require a lot of work, some very creative new products, managed expansion and, always, luck.

But for the first time, I am seeing -- I see a way for Tesla to be -- let's say, roughly twice the value of Saudi Aramco. I think that's -- I haven't quite seen that yet. I mean this is the first time I've seen that potential.

So we have an incredible product portfolio. I think we've got the most exciting product portfolio of any company on earth, some of which you've heard about, some of which you haven't. We're in the final lap for Cybertruck. We're building a Cybertruck line here at Giga Texas Austin and making a lot of progress in the robotaxi platform design."

For the record, Apple is currently worth $2.33 trillion and Saudi Aramco is worth $2.1 trillion. So, Musk thinks Tesla could be worth more than $4 trillion, versus the current market cap of $661.6 billion.

Shares of Tesla are down 5% today following earnings after the close.

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