Meanwhile, it appears shareholders are pleased with Tesla selling 75% of its Bitcoin holdings.
EV maker Tesla Inc (NASDAQ: TSLA) said it realized a $64 million profit from its Bitcoin sale after selling 75% of its holdings. Tesla announced in its Q2 earnings report that it sold $936 million worth of BTC out of liquidity concerns due to COVID shutdowns in China. CEO Elon Musk told investors that the sale does not rule out more purchases in the future. He added that the action is not a “verdict on Bitcoin,” with the company’s Bitcoin holdings remaining at $218 million.
“The reason we sold a bunch of our Bitcoin holdings was that we were uncertain when the COVID lockdowns in China would alleviate. So it was important for us to maximize our cash position, given the uncertainty of COVID lockdowns in China,” explained he.
Despite the general crypto crash, Tesla still profited from its Bitcoin sale. The company recorded impairment losses of $170 million in the first half of 2022. In an SEC filing, Tesla said the impairment loss resulted from “changes to the carrying value” of its Bitcoin holdings. Bitcoin’s performance over the past months has been a great concern to many. The cryptocurrency had dropped more than 50% from its record high in November last year. Again, it fell 2.5% to $23,078.18 an hour after Tesla announced its Bitcoin sell-off. On July 25th, the top crypto asset plunged significantly to trade at $21,969.29 per Bitcoin.
Tesla Stock Adds 9% after Bitcoin Sale
Meanwhile, it appears shareholders are pleased with Tesla selling 75% of its Bitcoin holdings. The electric vehicle maker pumped 9% from Wednesday’s market close at $742.50 to $812.16 on Monday. The gain is the highest Tesla has recorded since early May. The company’s stock has also increased 11.59% in the last five days, growing further by 9.60% over the past month. The last twelve months have been good for the automaker, improving by more than 22%.
Despite the Bitcoin sale, Tesla revealed that it still has $222 million worth of digital assets on its balance sheet as of June end. Tesla noted the possibility of increasing or lowering its holdings over time.
“As with any investment and consistent with how we manage fiat-based cash and cash equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on the needs of the business and on our view of market and environmental conditions.”
In the 2022 Q2 report, Tesla said its revenue dropped 9.7% to $16.9 billion from the previous quarter. Its gross profit decreased 22.5% to $4.2 billion from the first quarter. However, the company still reported positive free cash of $621 million. Also, the EV firm said it produced the highest volume of vehicles in its history during Q2.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
