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Saturday, August 20 2022
Technology

Tesla reveals $170 mn loss from $1.5 bn Bitcoin investment

Photo Credit : IANS

San Francisco: Elon Musk-run Tesla on Monday revealed it incurred $170 million loss from its Bitcoin investments in the first six months of the year.

Tesla revealed last week that it has sold 75 per cent of its Bitcoins, adding $936 million in cash to its balance sheet in the second quarter (Q2) this year, as it deals with economic meltdown amid cryptocurrencies falling off the cliff.

In a new filing with the US Securities and Exchange Commission (SEC), Tesla said that in the first quarter of 2021, it invested an aggregate $1.50 billion in Bitcoin.

“In the six month period ended June 30, 2022, we recorded $170 million of impairment losses resulting from changes to the carrying value of our bitcoin and gains of $64 million on certain conversions of bitcoin into fiat currency by us,” the electric car-maker revealed.

“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 our view of market and environmental conditions,” it added.

The carmaker also said it received a new subpoena from the SEC, related to Musk’s tweets about taking the company private in 2018.

The SEC had issued subpoenas to Tesla in connection with Musk’s prior statement that he was considering taking Tesla private.

“On November 16, 2021, and June 13, 2022, the SEC issued subpoenas to us seeking information on our governance processes around compliance with the SEC settlement, as amended,” the company informed.

In the Q2 earnings call with analysts, Musk said that the reason the company sold a bunch of its Bitcoin holdings “was that we were uncertain as to when the COVID lockdowns in China would alleviate”.

“So it was important for us to maximise our cash position, given the uncertainty of the COVID lockdowns in China. We are certainly open to increasing our Bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin,” he noted.

Musk said that the company was concerned about overall liquidity for the company given shutdowns in China.

“And we have not sold any of our Dogecoin,” he added.

Read more:

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Fired Tesla workers seek emergency protection from US court

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