Tesla sells $936 million worth of bitcoin due to negative second quarter
Categories: Crypto News US
Tesla sells $936 million worth of bitcoin due to negative second quarter
Last February, Tesla bought $1.5 billion worth of bitcoin for its balance sheet. After selling 10 percent to "test liquidity" two months later, the disused carmaker has now posted US$926 billion in sales after a poor second quarter. According to Tesla's financial statements, "as of the end of Q2, we have converted approximately 75% of our bitcoin purchases into fiat currency", adding, the conversion [bitcoin] in Q2 added $936 million in cash to our balance sheet.
The quarterly report noted that Tesla's bitcoin holdings remained largely stagnant for three consecutive quarters, although as of the end of March, its digital assets stood at only US$1.261 billion. Following the most recent sale, Tesla is said to have only 25 percent of the bitcoin it originally received, which is valued at approximately $218 million.
On the earnings call, Tesla CEO Elon Musk, who recently became embroiled in a legal dispute with Twitter, explained the reason for selling three-quarters of his bitcoin holdings. He then replied to a subsequent question, where he called crypto "a sideshow for a sideshow", not something that businesses spend any real time on, saying, "We are neither here nor on cryptocurrency are," he said.
While some criticized Musk for being a "hands on paper", others said he could return anytime knowing that "everyone gets the price they deserve". However, from a practical standpoint, it looks like Tesla had little choice if they wanted to avoid a catastrophic quarterly result. As one commenter noted, Tesla's cash flow would have been negative in the absence of bitcoin sales.