Tesla Makes $64 Million From Its Bitcoin Sale
Tesla Makes $64 Million From Its Bitcoin Sale
Although there has been mounting suspicion that Elon Musk’s Tesla, an electric vehicle manufacturer, sold 75% of its Bitcoin assets at a loss as of the second quarter of 2022, new reports imply otherwise.
In the second quarter, the corporation realized a realized gain of $64 million after selling 75% of its BTC stockpile for dollars, according to an official Form 10-Q filing with the United States Securities and Exchange Commission (SEC).
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According to the report, the EVM also declared impairment losses in the amount of $170 million “derived from changes to the carrying value” of its Bitcoin holdings. An impairment loss in finance happens when the fair value of an asset held by a corporation decreases below the investment’s carrying value.
More Details On Tesla’s Bitcoin Journey
- The filing elaborated on information and statements provided in Tesla’s quarterly earnings release and call on Wednesday. On the earnings call, Tesla Chief Financial Officer, Zach Kirkhorn, said that Tesla, “converted a majority of our bitcoin holdings to fiat for a realized gain, offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the [Profit and Loss Statement] included within restructuring and other.”
- According to the available data, Tesla recorded neither additions to or decreases in its Bitcoin holdings during the first quarter, nor did it record an impairment charge, therefore the company’s impairment charge and profit on disposal were all recorded during the second quarter of the year.
- Tesla first acquired $1.5 billion worth of bitcoin in the first quarter of 2021 but did not disclose its average purchase price. Later in that first quarter the company trimmed its bitcoin position by 10%, a sale that boosted that quarter’s earnings by $272 million.
Tesla Makes $64 Million From Its Bitcoin Sale
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- With second-quarter revenues of $16.93 billion, Tesla earned $2.27 per share. Despite declining QoQ, profits increased over the previous year. The business claimed that rising inflation and intensifying competition for battery cells had an impact on its profitability.
- The 10-K disclosure did not reveal any new insights about Tesla’s digital asset strategy. However, the company explained that it may increase or decrease its holdings over time.
- It reads, “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.”
The electric vehicle maker still has 10,800 BTC on its books, according to Bitcoin Treasuries. At a current price of around $22,000 BTC, Tesla’s digital asset holdings are worth roughly $237 million.
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