Tesla reports $170 million loss on Bitcoin investment

close-up photography of red car

Tesla records a loss of $170 million on its investment in Bitcoin in the first 9 months of this year. The US electric car manufacturer reported this to the US Securities and Exchange Commission as part of its third quarterly report.

Tesla pays tribute to the bear market

Even Tesla and the famous superhero Elon Musk are not protected from this “cryptic winter”. The electric car pioneer dumped $936 million worth of Bitcoin in the second quarter of 2022, on instructions from Musk himself. The Tesla boss justified the decision with profit and sales losses related to the pandemic in the Chinese market. The company wanted to recover cash due to this situation.

Tesla had $1.5 billion invested in BTC at the start of 2021, and still has $218 million in Bitcoin after the sale, according to the earnings report. The $170 million BTC loss contrasts with the $64 million gain the auto operator made by converting BTC to fiat money.

The SEC filing on that quarterly range is as follows:

“Digital assets are considered to be intangible assets with an indefinite useful life under the applicable accounting rules. Accordingly, if at any time after acquisition their market values ​​fall below our carrying amounts for those assets, we are required to record an impairment loss for those assets, and pending sale we are not permitted to make upward adjustments to for any appreciation. at market prices.”

Despite losses with BTC, Tesla had a strong third quarter. Tesla’s net profit per share could be increased to 3.33 billion US dollars. This corresponds to an increase of more than 100 percent compared to the same period last year.

Will Tesla stay true to cryptocurrencies?

It sounds like a “perfect fit” for the world’s number six most valuable company to invest in the largest cryptocurrency by market cap. However, the sale of $936 million worth of Bitcoin contradicts this perception.

At the time of the sale, Musk said that Tesla needed the money to cover costs related to the drop in profits in the Chinese market. An understandable entrepreneurial decision, because it focuses on developments in the real economy and ensures the profitability of the company.

The partial exit will probably not be seen as a fundamental departure from Bitcoin. The $218 million in digital assets Tesla has on its balance sheet, according to the 10-Q report, proves that.

Tesla Bitcoin

For such a huge corporation that has not made a profit for a long time, cryptography is just one of many investment decisions. As CEO, Musk is committed to the interest of his company and the interests of shareholders. As a result, every decision is also evaluated in terms of the development of Tesla shares.

Related to this, during the earnings call, the CEO of Tesla was asked if he intends to combine his companies Tesla, SpaceX and soon Twitter under one roof. A piece of Elon Musk’s life’s work could be symbolically acquired in the form of a share. Musk replied that he was not worried about the current concept.

In the crypto market, it is perceived with relative indifference that Tesla is now keeping its BTC holdings stable. After all, there has been a slight increase of 7% in the last 24 hours.

Bitcoin reclaims the $20,000 mark

After three weeks, the leading digital currency has broken the $20,000 mark again. The sideways movement that has existed since June is thus continuing. Bitcoin is up 7 percent on a daily basis and 7.1 percent on a weekly basis. BTC is currently 20,932.30 USD (as of 10/26/2022, 5:45 pm)

The slight spike in volatility is a sign of recovery after weeks of consolidation. It comes at a time when several US technology companies are releasing their earnings reports.

Institutional investments are helping Bitcoin match the pace of the S&P 500. Therefore, BTC can be expected to react to the third quarter results as well as stocks.

A proponent of cryptocurrencies is called Elon Musk. If you follow his Twitter activities, it seems that his heart is especially attached to Dogecoin. Numerous tweets in which Musk was positive about DOGE have already made waves. Even within the entrepreneur, it is not always completely clear whether Dogecoin or Bitcoin is in his favor. During an appearance on the comedy show Saturday Night Live in May 2021, Musk called Dogecoin a “hoax” in a skit, and the price fell by 28%.

In the middle of this year, his statement about the cryptocurrency, which started as a parody of Bitcoin, ended up with a billion dollar lawsuit from a crypto investor. The amount requested is a whopping 258 billion dollars. The investor and other investors who joined the lawsuit accuse Musk of price manipulation with his companies Tesla and SpaceX. With the help of his companies, he built a Ponzi scheme for Dogecoin.

Even after the lawsuit was filed, Musk made public statements that show the South African-born entrepreneur doesn’t seem to be taking the law very seriously. Also on Twitter, he recently promoted his latest product, a perfume called “Burnt Hair,” which is said to smell “like bending over a candle at the dinner table, but without all the hard work. “

Flamethrowers, perfume, flights into space – everything can be paid for with Dogecoin

Musk’s perfume creation, like the flamethrower with the name “Not-a-Flamethrower”, is distributed by “The Boring Company”. Everything payable in Dogecoin – of course. Interestingly enough, the tunnel boring company, which is supposed to solve traffic problems with the so-called loops, is also the source of Musk’s personal “gimmicks”.

To look soberly, the question is raised, for example tunnel drills, flames, perfume. Missiles and electric cars go together. However, this issue clearly does not affect the success of Musk’s company and his personal financial success. The perfume and the flame are sold out. Sometimes these are offered on eBay for astronomical prices. Officially, 20,000 units of the “Not-a-Flamethrower” were sold through the Boring Company store.

The fact that even such silly products can be sold when the name Musk is involved is based on the myth of Elon Musk and at the same time adds to it. Musk’s rather humorous handling of the Dogecoin meme shouldn’t distract from the fact that he sees Bitcoin as a serious investment for his billion-dollar company Tesla.

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