During Tesla’s second-quarter earnings report, the company announced that it had sold 75% of its Bitcoin holdings for $963 million.
However, while a significant percentage of major cryptocurrencies have been sold off, Elon Musk has revealed that Tesla is sticking to its Dogecoin holdings.
Elon Musk and Dogecoin
The news came via a quarterly call to investors that Musk has not sold any of his Dogecoin holdings.
“We have not sold any of our Dogecoin,” he said. “We still have it.”
The CEO of Tesla has previously stated that although he personally owns Dogecoin, he has not indicated that the company owns the coin
However, the automaker accepts Dogecoin as payment for some products on its website.
It’s unclear whether Tesla was holding the tokens to buy goods or making special coin purchases that the CEO was supporting on Twitter.
Tesla and cryptocurrencies
The automaker revealed that the $963 million in Bitcoin left it with $218 million in digital assets.
It is reported that Tesla had over 32,000 bitcoins planned for the second quarter, and at 75% of sales, there would likely be around 10,500 left by the end of the quarter.
“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchase into fiat currency,” the press release reads.
“Conversions in Q2 added $936 of cash to our balance sheet.”
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Early Bitcoin ventures
Prior to selling its assets, Tesla had not bought or sold any of its Bitcoin holdings since the first quarter of 2021 – it bought $ 1.5 billion in Bitcoin.
The company then scrapped 10% of its assets and sold it for $ 272 million in cash.
Why did Tesla sell its Bitcoins?
Speaking to analysts, Elon Musk explained that “the reason we sold some of our Bitcoin stock was because we weren’t sure when COVID blocks in China would loosen.
“So it was important for us to maximize our cash position, given the uncertainty of the COVID lockdowns in China.”
“We are certainly open to increasing our Bitcoin holdings in the future,” Musk added. So this shouldn’t be taken as a judgment on Bitcoin.
“So this should not be taken as some verdict on Bitcoin. It’s just that we were concerned about overall liquidity for the company, given COVID shutdowns in China.
And we have not sold any of our Dogecoin.”
Read also: Elon Musk Stands His Ground in Supporting Dogecoin Despite Lawsuit
The earnings report
Tesla’s second quarter earnings report on Wednesday showed earnings ahead of estimates, with earnings in line with expectations.
During the quarter, adjusted earnings per share were $2.27 compared to an estimate of $1.83. Revenue was $16.9 billion, slightly above expectations of $16.88 billion.
2021
Following the unveiling of Bitcoin in 2021, Musk announced that Tesla would also accept Bitcoin as payment for its vehicles.
A month later, Tesla’s CEO appeared on Saturday Night Live in a skit in which he called Dogecoin a “hustle” and sent the cryptocurrency down 20% an hour later.
Four days later, Tesla withdrew Bitcoin from Tesla’s offering, with Musk expressing concern about “rapidly increasing use of fossil fuels for Bitcoin mining,” the process by which Bitcoin is created.
Musk also said the company would not sell any of its Bitcoins.
Aftermath
Tesla’s latest earnings release follows a report from Barclays analyst Brian Johnson.
He warned that the company could face a write-down of up to $460 million if it did not decide to sell its bitcoin holdings.
The sale reduced Tesla’s depreciation for holding the asset, as publicly traded companies are required to account for the asset.
Tesla shares were little changed in after-hours trading, up 0.6%.
Shares of the company have also risen 4% over the past month. Bitcoin is currently trading at $22,760.60, a significant increase from the price of $18,000 at the end of June.
References:
Tesla sells $936 million worth of Bitcoin in the second quarter, still holds Dogecoin
Elon Musk discloses that Tesla owns Dogecoin, but how much does it have?
