Tesla last week revealed it sold almost $1 billion worth of the bitcoin it bought early last year, with Tesla chief executive Elon Musk downplaying the move.
The bitcoin price managed to avoid a sell-off following the news, partly due to Musk explaining it was only to maximize Tesla’s cash position and uncertainty over ongoing China lockdowns.
Now, the bitcoin and crypto market is braced for Tesla’s TSLA 10-Q regulatory filing, expected in the coming days, which could reveal on what date and at what price Tesla sold almost $1 billion worth of bitcoin.
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“I’m anxious to see the actual filings—to see if they disclose the date that they sold, the price that they sold at,” Aaron Jacob, head of accounting solutions at cryptocurrency software company TaxBit, told Bloomberg. “They may not disclose any of that.”
Tesla announced it had sold about 75% of the $1.5 billion bitcoin it bought over a year ago, adding $936 million in cash to its balance sheet even after an almighty bitcoin price crash that’s wiped $2 trillion from the combined crypto market. The company recorded a “depreciation, amortization, and impairment” charge of $922 million during the quarter.
“In short, analysts were preparing for [around] $460 million in impairment loss,” Jacob said in emailed comments.
“By selling, they book a realized loss that will be far less than that (because they likely sold before the bottom) but then have a cash event to bolster their cash position. So it’s a cash event loss rather than a non-cash impairment. We need to see their report to be sure how they booked it.”
Tesla’s 10-Q—a financial performance that typically includes more details than a brief earnings report and must be filed around 40 days following an earnings report—could shed light on how bitcoin both helped and hurt Tesla’s balance sheet. Last year, Tesla’s 2021 second-quarter 10-Q was filed on July 27.
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“Tesla’s disclosure is really vague and not transparent,” Vivian Fang, accounting professor at the University of Minnesota’s Carlson School of Management, told Bloomberg. “It is very difficult to realize exactly what is the realized gain and what is the impairment charge.”
Despite the sale, Musk tried to reassure the bitcoin and crypto market, saying Tesla would be “open to increasing bitcoin holdings in future.”
“This should not be taken as some verdict of bitcoin,” Musk said, speaking on Tesla’s earnings call, adding Tesla hasn’t sold dogecoin but cryptocurrency is “not something we think about a lot,” calling it “a sideshow to the sideshow.”
“The fundamental good of Tesla and the reason we’re doing this is to have the day of sustainable energy come sooner. That’s our goal. We’re neither here nor there on cryptocurrency.”
In June, Musk, revealed he’s still buying the joke bitcoin rival dogecoin and will continue to “support it,” after his rocket company SpaceX followed Tesla in adopting dogecoin payments, allowing customers to buy merchandise using dogecoin.