Tesla Bought 1.5 B in Bitcoins

[CryptoCrookz]

Good point with the quarterly results, Tesla reports might be interesting crypto market signals in the foreseeable future. Positively surprised BTC did not dump as much as I thought it would with these news.

TSLA is releasing their financial results for 21Q1 and revealed an interesting fact:

Tesla Sold Bitcoin in Q1 for Proceeds of $272M

"Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in "Restructuring & Other line) were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items. Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses."

Interestingly, they had quite a positive impact from the move:



Please note that they are so in the money that they have more value in Bitcoin now than when they first bought it.
They might be using this trick to boost profitability in "difficult" quarters.

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[Sithara007]

I am not sure whether this is a good news for us. I was thinking that they are accumulating Bitcoins for the long term. But it looks as if they are indulging in speculative trading, at least with a part of the stash. They got the coins for a relatively cheap rate, so it makes sense for them to sell some of these coins. But I am curious about the tax implications. They have sold their coins just a few months after the purchase. Therefore short term capital gains tax will be applicable over the gains.

[LUCKMCFLY]

Elon has so far been responding to all the accusations that have been made against Pump and Dump, he said that he only cashed in for 10% of his crypto holdings, that he has not sold any Bitcoin.

During Tesla’s earnings call CFO Zachary Kirkhorn said that Bitcoin was “a good decision” for the company:

Bitcoin has proved to be a good decision, a good place to put some of our cash that’s not being used for daily operations…and be able to get some return on that.

The e-car maker views its remaining Bitcoin as a long-term holding:     

We do believe long-term in the value of bitcoin, so it is our intent to hold what we have long-term.

Source: https://u.today/elon-musk-addresses-accusations-about-pumping-and-dumping-bitcoin

To corroborate this information also by cointelegraph:

Rejecting Portnoy’s assertion, Musk stated that “Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet,” adding:

“I have not sold any of my Bitcoin.”

Source: https://cointelegraph.com/news/i-have-not-sold-any-of-my-bitcoin-elon-musk

To clarify, I think that the price will continue to increase, as it was in the bullish trend ...

[CryptoCrookz]

It might be pretty good news. Tesla has just shown Bitcoin can be a viable cash reserve stash and can be used to make a quarterly earnings report look pretty good. There are lot of corporations with major money just laying around. If they start to put part of that into crypto, meaning Bitcoin, well that would be really something.

Do remember Bitcoin pricing still reflects it is a risky asset. The more big players get in, the less risky it becomes, the lower this negative risk premium.

I am not sure whether this is a good news for us. I was thinking that they are accumulating Bitcoins for the long term. But it looks as if they are indulging in speculative trading, at least with a part of the stash. They got the coins for a relatively cheap rate, so it makes sense for them to sell some of these coins. But I am curious about the tax implications. They have sold their coins just a few months after the purchase. Therefore short term capital gains tax will be applicable over the gains.

[Poker Player]

It might be pretty good news. Tesla has just shown Bitcoin can be a viable cash reserve stash and can be used to make a quarterly earnings report look pretty good. There are lot of corporations with major money just laying around. If they start to put part of that into crypto, meaning Bitcoin, well that would be really something.

Do remember Bitcoin pricing still reflects it is a risky asset. The more big players get in, the less risky it becomes, the lower this negative risk premium.

I agree, but there is one thing that still sets bitcoin apart from cash, which is volatility. I understand that they have sold because they were in profit, but if they were currently at a loss, would they have sold? Maybe if you need liquidity it is better to take a loan leaving Bitcoin as collateral, as Saylor says. Musk does so in his personal life:

Elon Musk, short on cash, keeps borrowing more and more money even as Tesla stock surges

[NeuroticFish]

It might be pretty good news. Tesla has just shown Bitcoin can be a viable cash reserve stash and can be used to make a quarterly earnings report look pretty good. There are lot of corporations with major money just laying around. If they start to put part of that into crypto, meaning Bitcoin, well that would be really something.

Do remember Bitcoin pricing still reflects it is a risky asset. The more big players get in, the less risky it becomes, the lower this negative risk premium.

I am a bit mad on this news. I don't see it as a "pretty good news". I see them as somebody with indeed huge financial power playing pump and dump games on us, showing others with similar financial power what can be done (if they didn't know already).

In theory I agree that the more such big players come in, the less risky Bitcoin should become, unless they start playing pump and dump games, because there may be insufficient regulation in that area...

[ancafe]

I am not sure whether this is a good news for us. I was thinking that they are accumulating Bitcoins for the long term. But it looks as if they are indulging in speculative trading, at least with a part of the stash. They got the coins for a relatively cheap rate, so it makes sense for them to sell some of these coins. But I am curious about the tax implications. They have sold their coins just a few months after the purchase. Therefore short term capital gains tax will be applicable over the gains.

Well, that's great news guys, to be honest I'm still waiting for some spectacular news from Elon Musk for bitcoin. however, we do feel the changes taking place for now. however, it doesn't seem like there are any significant developments at this point regarding Elon Musk's moves regarding bitcoin, if so then I haven't heard or read them.

[Mauser]

It might be pretty good news. Tesla has just shown Bitcoin can be a viable cash reserve stash and can be used to make a quarterly earnings report look pretty good. There are lot of corporations with major money just laying around. If they start to put part of that into crypto, meaning Bitcoin, well that would be really something.

Do remember Bitcoin pricing still reflects it is a risky asset. The more big players get in, the less risky it becomes, the lower this negative risk premium.

I am a bit mad on this news. I don't see it as a "pretty good news". I see them as somebody with indeed huge financial power playing pump and dump games on us, showing others with similar financial power what can be done (if they didn't know already).

In theory I agree that the more such big players come in, the less risky Bitcoin should become, unless they start playing pump and dump games, because there may be insufficient regulation in that area...

I think Elon Musk just wants to diversify out of USD. They got so much cash and don't know what to do with it. The latest volatility on the bitcoin market might make some bigger investors nervous, but if you have a long term approach and don't need the money in the meantime than doing for bitcoin is a good idea. Also without all these marge corporations buying into the market we would have never reached 64,000 USD so quickly.

[NeuroticFish]

I think Elon Musk just wants to diversify out of USD.

It's Tesla, not Elon. Elon wrote on Twitter that he didn't sell any of his personal coins.

They got so much cash and don't know what to do with it.

Then why selling Bitcoin?!

The latest volatility on the bitcoin market might make some bigger investors nervous

I don't think so. For example Tesla has bought at under 40k, isn't it? The others bought most of their stash a lot earlier.

Also without all these marge corporations buying into the market we would have never reached 64,000 USD so quickly.

True, but if they all start doing pump and dump games, it'll get ugly.
On the other hand, at least Tesla admitted it and the others may do it silently...

[PrimeNumber7]

Tesla Sold Bitcoin in Q1 for Proceeds of $272M

I am not quite sure what this is about. Elon Musk has said he intends to hold all the bitcoin Tesla owns/receives.

Please note that they are so in the money that they have more value in Bitcoin now than when they first bought it.
They might be using this trick to boost profitability in "difficult" quarters.

Investors, in normal times, will only care about future cash flows. This means investors will only care about ongoing profits. Any profits from the sale of coin is not going to be "ongoing" but will rather be "one time" profits. Unless Tesla is fighting for its survival, profits from speculative investments such as bitcoin will not factor into Tesla's potential long term value, other than the current value of it's assets.

[Anonylz]

I am a bit mad on this news. I don't see it as a "pretty good news". I see them as somebody with indeed huge financial power playing pump and dump games on us, showing others with similar financial power what can be done (if they didn't know already).

In theory I agree that the more such big players come in, the less risky Bitcoin should become, unless they start playing pump and dump games, because there may be insufficient regulation in that area...

Don't you think institutions coming into btc is inevitable!, especially seeing how btc has elvolved over time, i think it was already bound to happen, too much good things where happening around btc that this institutions can no longer stay away, maybe all this while they where waiting for the right moment to come in and 2020/2021 seem to be the perfect time for that,
i can understand your concern, this institution have the financial power to manipulate and play with the market but on the other hand, their investment is also important, it will guarantee sustainability and much growth, for now, we can only hope they did not play pump and dump too much and just hold to sustain the market price.

[NeuroticFish]

Don't you think institutions coming into btc is inevitable!, especially seeing how btc has elvolved over time, i think it was already bound to happen, too much good things where happening around btc that this institutions can no longer stay away, maybe all this while they where waiting for the right moment to come in and 2020/2021 seem to be the perfect time for that,
i can understand your concern, this institution have the financial power to manipulate and play with the market but on the other hand, their investment is also important, it will guarantee sustainability and much growth, for now, we can only hope they did not play pump and dump too much and just hold to sustain the market price.

I know that institutions coming to Bitcoin is inevitable. The road was paved by Greyscale, MicroStrategy and a few others. It's a normal move by now.
My concern is about fair play, let's say. Because without this fair play, a lot of troubles will follow. And what Tesla did is not fair play.

[casperBGD]

It might be pretty good news. Tesla has just shown Bitcoin can be a viable cash reserve stash and can be used to make a quarterly earnings report look pretty good. There are lot of corporations with major money just laying around. If they start to put part of that into crypto, meaning Bitcoin, well that would be really something.

Do remember Bitcoin pricing still reflects it is a risky asset. The more big players get in, the less risky it becomes, the lower this negative risk premium.

I am a bit mad on this news. I don't see it as a "pretty good news". I see them as somebody with indeed huge financial power playing pump and dump games on us, showing others with similar financial power what can be done (if they didn't know already).

In theory I agree that the more such big players come in, the less risky Bitcoin should become, unless they start playing pump and dump games, because there may be insufficient regulation in that area...

agree on this one
it is a bit irresponsible from Tesla to have sold their holdings within the same quarter, that puts them on daily traders move, not car selling company, that diversify their cash holdings

could not agree that they needed to do that because there was a surplus in their investment, and that this is a good news, it is actually pretty bad one, from my point of view, puts BTC in speculative pump-and-dump assets class for big players

what do you think, will Elon be investigated for this by SEC, since his tweets were a bit misleading regarding TSLA and BTC, and certainly had influence on price, which is kind-a not pure legal

[NeuroticFish]

what do you think, will Elon be investigated for this by SEC, since his tweets were a bit misleading regarding TSLA and BTC, and certainly had influence on price, which is kind-a not pure legal

I don't know how TSLA price has been moving, I'm not interested much in stocks.
Although it's an interesting thought, if you only meant the bitcoin price, SEC will not care. If TSLA price is involved (too), then yes, it may be the case.

[fillippone]

Just to put all this in context, even if this tweet has been mentioned before in this thread: Elon said that the sell came basically to test market liquidity.

Of course if you buy 1.5 BLN USD in Bitcoin, you want to make sure you can convert your 2 BLN ( ) back into USD without any hassle. Seems natural to me!



TSLA was deep in the money on this trade:




Bitcoin magazine wrote a pice on this:


TESLA ANNOUNCES MAJOR PROFIT AFTER SELLING SMALL PORTION OF BITCOIN

Tesla has sold portions of the bitcoin it held on its balance sheet, according to its latest quarterly earnings report. The auto-tech giant reportedly took in profits of $272 million from the sale of its digital assets, accounting for just a small percentage of its total BTC holdings, given its initial purchase of $1.5 billion.

[Arkann]

what do you think, will Elon be investigated for this by SEC, since his tweets were a bit misleading regarding TSLA and BTC, and certainly had influence on price, which is kind-a not pure legal

I don't know how TSLA price has been moving, I'm not interested much in stocks.
Although it's an interesting thought, if you only meant the bitcoin price, SEC will not care. If TSLA price is involved (too), then yes, it may be the case.

in fact, there is nothing criminal in Elon Musk's actions and he has every right to invest his funds in Bitcoin, as he can post the appropriate tweets on his Twitter account. But if the regulatory authorities can prove the fact that he deliberately decided to manipulate the market and, accordingly, used his tweets for this, then in this case there could really be a trial. But only for this, legal grounds are needed, especially when it comes to the real use of cryptocurrency, and, accordingly, if his actions are aimed at increasing the value of Tesla shares.

[newwest]

what do you think, will Elon be investigated for this by SEC, since his tweets were a bit misleading regarding TSLA and BTC, and certainly had influence on price, which is kind-a not pure legal

I don't know how TSLA price has been moving, I'm not interested much in stocks.
Although it's an interesting thought, if you only meant the bitcoin price, SEC will not care. If TSLA price is involved (too), then yes, it may be the case.

in fact, there is nothing criminal in Elon Musk's actions and he has every right to invest his funds in Bitcoin, as he can post the appropriate tweets on his Twitter account. But if the regulatory authorities can prove the fact that he deliberately decided to manipulate the market and, accordingly, used his tweets for this, then in this case there could really be a trial. But only for this, legal grounds are needed, especially when it comes to the real use of cryptocurrency, and, accordingly, if his actions are aimed at increasing the value of Tesla shares.

He is business man and knows his power and how to manage things. So why not make use of the name he has and makes profits, because he would have had his own course of path to reach where he is today. Also, by rising the bitcoin and doge, their would be investors who would have made good money due to that spike happened just due to him.

[iamsheikhadil]

I am not sure whether this is a good news for us. I was thinking that they are accumulating Bitcoins for the long term. But it looks as if they are indulging in speculative trading, at least with a part of the stash. They got the coins for a relatively cheap rate, so it makes sense for them to sell some of these coins. But I am curious about the tax implications. They have sold their coins just a few months after the purchase. Therefore short term capital gains tax will be applicable over the gains.

I don't think they have purchased them for making profits per se to be honest, Tesla wanna have a monopoly on the latest tech, it wants to be something different than just a company aimed at making profits (which is a business) but an innovation hub. Elon was never really ever serious about making huge money, that's why he was always setting his visions on priority even when he wasn't even in top rich list and maintained that when he was the richest person of the planet.

[bryant.coleman]

If there was any doubt regarding the intentions of Tesla and Elon Musk, then the latter's tweet seems to have removed it. First of all, Tesla has sold only a small portion of the coins it hold (10% to be precise) and Elon's explanation is that they sold the coins to test the liquidity of Bitcoin. In the end, it turned out well for all the sides involved. The reaction from the cryptocurrency market has been overwhelmingly positive, with BTC rising by 8% against the US Dollar.

[goldade]

I believe Tesla buying this huge worth of bitcoin shows how much of recognition bitcoin is gaining in the mainstream world. For them to buy this huge amount of bitcoin shows how much they believe in the potential of bitcoin.
I'm not sure as to why they bought it, but I'm sure making profits is one of it. There's no way one wouldn't make tremendous profits with that amount of bitcoin even if there's a slight increase in the price of bitcoin, not to talk about holding it for a very long period of time.
I believe this is a great move by Tesla, adding bitcoin to their portfolio. I'm sure  other companies would follow in Telsa's footsteps