Elon Musk secretly sold Tesla’s Bitcoin as soon as its value fell

When Elon Musk invested 1,500 million Tesla dollars in Bitcoin, he assured that he was not doing it for speculation, but because he trusted the future of this cryptocurrency. “I don’t really believe in selling when the price is going up and things like that. I wish Bitcoin would succeed,” he said. In the end, this is exactly what he did: sell the piece when its value multiplied and get out of Bitcoin as soon as its depreciation threatened to lose him a lot of money.

This last movement took place without any public communication. It appeared a few months later in the company’s accounts for the second quarter of the year, which the company is required to publish as listed. Musk, Tesla’s CEO and an ardent advocate of the future of cryptocurrencies, as well as the company itself, have kept the operation secret until now, even though the sale took place in April when bitcoin fell below what it was priced at. They were purchased by a company that has not been withdrawn.

The lack of publicity for the sales operation contrasts with the publicity that Musk and Tesla have given to their acquisition drive. When the billionaire announced his $1.5 billion investment in Bitcoin in February 2021, he took the cryptocurrency to its all-time high of around $45,000. He would then beat it repeatedly before reaching $69,000 in November. At that time, the company was converting bitcoins into money and making a profit. At the end of 2021, his balance sheet showed that he still held about $1.26 billion from his initial investment in Bitcoin.

However, starting in April, Bitcoin began a steady decline, dragging down the entire crypto sector with it. According to Tesla’s second-quarter results this Wednesday, the company disposed of a large portion of its investment in Bitcoin as soon as the price dropped below the margin at which it had bought. He sold $1.043 million in Bitcoin and signed off with around 936 million fiat money, managing to keep his losses down to around $107 million.

Since then, Bitcoin has continued to collapse, and cryptocurrency companies have either declared bankruptcy or gone bankrupt. Hundreds of thousands of investors who didn’t get out in time face losses or the possibility of holding crypto-investments for too long. The sector calls it “crypto winter” and some estimates say it will last several years.

At the press conference held after the presentation of the results, Musk assured that the sale of cryptocurrency is the result of the coronavirus. “The reason we sold our bitcoin holdings was because we weren’t sure when the COVID-19 lockdown in China would be eased, so it was important for us to maximize our cash position,” he said of investors.

According to its accounts, Tesla has about $213 million left over from its $1.5 billion investment in Bitcoin in February 2021. About them, Musk said that his company is “certainly ready to increase our bitcoin reserves in the future.” “.

Tesla is multiplying profits but losing margins

In addition to Bitcoin moves, the electric car maker managed to increase its profits in the second quarter. It earned 42% more than the previous three months and 253% more than the same period in 2021, which equates to $5,577 million after taxes.

In the first six months of 2022, Tesla sold cars and related services for 31.463 million, which is 88% of its revenue. The rest comes from generating and storing energy from its power plants.

In total, the manufacturer produced 563,987 vehicles “despite ongoing supply chain challenges and factories beyond our control. June 2022 was the highest production month in Tesla’s history. However, its profit margin per vehicle fell from 32.9% last quarter to 27.9%. The company recognizes that inflation and increasing demand for car batteries will pose an increasing challenge in the future.

Tesla, for its part, reported that its Berlin assembly plant reached 1,000 vehicles per week in June and that Tesla’s Texas “gigafactory” has begun delivering the first vehicles with the latest generation of batteries. Finally, Musk announced that the company may be ready to bring its new electric truck to market, a pickup that it calls Cyber ​​truckMid 2023.