Tesla’s Bombshell Earnings! BTC: The Pivotal Ingredient
Tesla revealed that it sold part of its Bitcoin investment during the first quarter of 2021, profiting $272 million.
Tesla filed a 10-K with the Securities and Exchange Commission (SEC) in early February, detailing a huge $1.5 billion investment in Bitcoin, a cryptocurrency that has skyrocketed in value over the last year.
Bitcoin and Tesla: A Match Made In Heaven
Tesla defined the transaction in the portion of its Update Letter titled “Cash Flows From Investing Activities.” Income of $272 million was mentioned under “Proceeds from sales of digital properties.”
The firm said,
“Under this strategy, we invested a total of $1.50 billion in bitcoin and would buy and retain digital assets on an as-needed or long-term basis. Furthermore, pursuant to relevant legislation and initially on a restricted basis, we plan to begin accepting bitcoin as a means of payment for our goods in the immediate future, which we can or may not liquidate upon receipt”
In the filing, Tesla also detailed how consumers could buy the company’s vehicles using Bitcoin, although this could be liable to Capital Gains tax since it is considered the selling of an investment.
However, the electric carmaker led by CEO Elon Musk agreed to sell some of its Bitcoin holdings. It explained the decision in the Q1 2021 Update Letter and Shareholder Deck, stating that the Bitcoin deal, coupled with other considerations, helped to increase gross margins.
Tesla stated:
“Year over year, positive impacts from sales increases, regulatory allowance sales growth, gross margin expansion led by incremental commodity cost reductions, and selling of Bitcoin ($101M positive effects, net of associated impairments, in “Restructuring and Other” line) were primarily offset by a lower ASP, higher SBC, added supply chain costs, R&D improvements, and other products. Changeover costs for the Model S and Model X changed all operating profit and R&D expenses.”
Musk has become an advocate for cryptocurrencies such as Bitcoin and Dogecoin as well as prt of the NFTs celeb fans. During a Clubhouse session in February, Musk said,
“I do at this stage think Bitcoin is a positive idea, and I am a fan of Bitcoin. I believe Bitcoin is on the brink of widespread adoption among traditional financial professionals.”
Tesla recorded a historic seventh straight quarter of profitability, with sales of $10.389 billion, non-GAAP earnings per share of $0.93, and non-GAAP net profits above $1 billion for the first time in the company’s history.
Aside from its cryptocurrency operation, Tesla recorded net profits of $438 million in the third quarter, a new all-time record. Earnings per share is 93 cents on sales of $10.39 billion. Elon Musk’s company has stated that it expects vehicle delivery development to reach 50% this year, implying a minimum of 750,000 vehicles delivered in 2021.
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Originally published at https://eliteclubsignals.com on April 27, 2021.
