- Tesla held $218 million worth of digital assets on its balance sheet as of June 30
- Musk said crypto is “not something we think about a lot”
Tesla sold roughly 75% of its bitcoin in the second quarter as part of conversions that added $936 million to its balance sheet, the company reported, but could seek to buy more of the asset again.
“We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as some verdict on bitcoin,” Elon Musk said during the electric car company’s earnings call on Wednesday. “It’s just that we were concerned about overall liquidity for the company, given Covid shutdowns in China.”
The CEO noted that Tesla has not sold any of its dogecoin.
Though Tesla converted a majority of its bitcoin holdings to fiat for a realized gain, according to Chief Financial Officer Zachary Kirkhorn, impairment charges on the remainder of its holdings resulted in a net cost of $106 million.
Tesla reported buying $1.5 billion worth of bitcoin in February 2021, as the company noted it would start accepting the asset as a form of payment. Bitcoin prices rose to roughly $44,000 after that announcement.
Bitcoin was trading at about $22,630 at 8:15 am ET on Thursday, down roughly 67% from its all-time high of nearly $70,000 last November.
Overall, Tesla held $218 million worth of digital assets on its balance sheet as of June 30, down from $1.26 billion at the end of March.
Laura Hoy, an equity analyst at Hargreaves Lansdown, noted that though it’s unclear exactly how much Tesla lost to the sell-off in crypto, most of the damage has been recognized.
“However, the bitcoin losses point out an important part of the Tesla investment case — its eccentric owner,” Hoy said in a statement.
“While Musk’s impressive innovation has served the company well, his personal flair is starting to raise governance questions.”
When asked about how the company views bitcoin long term, Musk called crypto “a sideshow to the sideshow,” noting that, “we’re neither here nor there on cryptocurrency.”
“Cryptocurrency is not something we think about a lot,” Musk added. “We think a lot about scaling production and accelerating the advent of sustainable energy.”
A Tesla spokesperson did not immediately return a request for comment.
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Source: https://blockworks.co/elon-musk-teslas-bitcoin-sale-not-a-verdict-on-the-asset/