Tesla Sells 75% of Its Bitcoins but Leaves Dogecoins Untouched According to Musk and Q2 Earnings Report

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Q2 earnings report emerged; Tesla sells 75% of Bitcoins while Dogecoins are still complete
Q2 earnings report emerged; Tesla sells 75% of Bitcoins while Dogecoins are still complete

During Tesla’s second-quarter earnings report, the company announced that it had sold 75% of its holdings in Bitcoin for $963 million.

Although a significant percentage of the major cryptocurrencies have been sold, Elon Musk revealed that Tesla is holding onto its Dogecoin shares.

Elon Musk and Dogecoin

The news came via a quarterly appeal to investors that Musk has not sold any of his stakes in Dogecoin.

“We have not sold any of our Dogecoin,” he said. “We still have it.”

Tesla’s CEO previously stated that although he personally owns some Dogecoins, 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 held the tokens to purchase goods or made special coin purchases that Musk endorsed on Twitter.

Tesla and crypto

The automaker announced that the $963 million in bitcoins left it with $218 million in digital assets (likely the remaining Bitcoin).

It is reported that Tesla had forecast over 32,000 bitcoins for the second quarter, and at 75% of sales, there would likely be around 10,500 left by the end of the quarter.

Read also: Tesla’s Gigafactory Berlin Set for an Expansion, Productions to be Halted for Two Weeks

“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.”

Tesla’s early Bitcoin ventures

Before selling its assets, Tesla hadn’t bought or sold any of its bitcoin holdings since the first quarter of 2021 – it bought $1.5 billion worth of Bitcoins.

The company then scrapped 10% of its assets and sold them for $272 million in cash.

Why did Tesla sell its Bitcoins?

Speaking to analysts, Elon Musk explained, “The reason we sold some of our Bitcoin holdings was because we didn’t know when the COVID lockdowns in China would be relaxed.

“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 should not 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: Apple and Tesla Among Several Tech Companies to Hit a Brake on Hiring

The earnings report

Tesla’s second-quarter earnings report on Wednesday showed above-estimated earnings, with earnings in line with expectations.

During the quarter, adjusted earnings per share were $2.27, compared with an estimated $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 by Barclays analyst Brian Johnson. He warned that the company could face a write-off of up to $ 460 million if it didn’t decide to sell its bitcoin holdings.

The sale reduced Tesla’s depreciation for holding the asset, as publicly traded companies have to account for the asset.

Tesla shares changed little in after-hours trading, up 0.6%.

Shares in the company have also risen 4% in the past month. Bitcoin is currently trading at $22,760.60, a significant increase from its late June price of $18,000.

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?


Opinions expressed by Market Daily contributors are their own.

Stephen Cook

Stephen is a dedicated businessman and an angel investor. He usually features his written works in several business blogs and works as a marketing consultant to various companies.

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