Tesla Inc. TSLA said in its first-quarter earnings report on Monday that it sold $272 million worth of its Bitcoin (BTC) holdings in the quarter.
What Happened: In its earnings report, Tesla said it recorded $1.5 billion in purchases of digital assets in the quarter. The electric vehicle maker showed the $272 million Bitcoin sale under “proceeds from sales of digital assets" in the report.
Further, Tesla said the sale of Bitcoin made a “positive impact” of $101 million to the company’s profitability during the quarter.
Tesla CEO Elon Musk is a big supporter of Bitcoin as well as Dogecoin (DTC) and frequently tweets about cryptocurrencies, especially the latter. Musk’s tweets regarding Dogecoin sometimes have an overwhelming impact on the price of the meme cryptocurrency.
See also: How to Buy Bitcoin (BTC)
On Monday, Barstool Sports founder Dave Portnoy questioned Tesla's Bitcoin sale on Twitter, saying that Musk pumps up Bitcoin after buying it and then makes a fortune by selling it later at a higher price.
Musk replied to the tweet, saying, he continues to hold Bitcoin and Tesla sold 10% of its holdings essentially to prove the liquidity of Bitcoin as an alternative to holding cash on the balance sheet.
Why It Matters: The earnings report shows Tesla’s Bitcoin investment has helped the electric vehicle maker to boost its profits. The company’s first-quarter results beat Street estimates.
In February, Tesla announced it invested an aggregate of $1.5 billion of cash in Bitcoin. The company noted that the decision was meant to provide more flexibility to further diversify and maximize returns on its cash that was not immediately needed to maintain operating liquidity.
The Palo Alto-based company said last month that it has begun accepting payments for its vehicles with Bitcoin. Musk said Tesla would retain those payments in their digital asset form and forego converting them to fiat.
Price Action: Tesla shares closed 1.2% higher in Monday’s regular trading session at $738.20. However, the stock declined almost 2.5% in the after-hours session to $719.85.
Photo by Heisenberg Media on Flickr
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.