Electric vehicle carmaker Tesla (Nasdaq: TSLA) revealed in a Q1 earnings report that it has sold a portion of its bitcoin holdings.
The company sold some of its bitcoin and received $272 million in proceeds.
Tesla sells a portion of its bitcoin
The carmaker joined the bitcoin bandwagon in February of this year when it announced that it had splashed $1.5 billion on BTC purchases “for more flexibility to further diversify and maximize returns on cash.”
Tesla’s bitcoin purchase was facilitated by Coinbase, a leading U.S. cryptocurrency exchange that recently listed on the Nasdaq stock exchange.
The sale of bitcoin worth $272 million would leave Tesla with BTC with a value of at least $1.33 billion, according to the price as of February 8.
This figure is much higher given the surge in bitcoin price since Tesla’s initial purchase. That said, filing rules do not allow for Tesla to factor in the price movement since then.
Detailing the sale of the bitcoin holdings, the report says:
“Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101M positive impact, net of related impairments, in ‘Restructuring & Other’ line) were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items.”
“Model S and Model X changeover costs negatively impacted both gross profit as well as R&D expenses,” the report continues.
Tesla cash outflow in Q1
The company acknowledged the reduction in cash equivalents are mainly due to bitcoin purchases.
“Quarter-end cash and cash equivalents decreased to $17.1B in Q1, driven mainly by a net cash outflow of $1.2B in cryptocurrency (Bitcoin) purchases, net debt and finance lease repayments of $1.2B, partially offset by free cash flow of $293M.”
Tesla and bitcoin
The price of bitcoin surged from around $39,000 to $42,000 when the carmaker announced that it held bitcoin on its balance sheet.
In March, Tesla CEO Elon Musk revealed through a tweet that customers could now buy a Tesla vehicle with bitcoin. To be sure, Musk has become an influential crypto figure. In fact, some of his tweets have played a crucial role in pumping the price of Dogecoin. This seems to be his favorite cryptocurrency.
As Tesla sells some of its bitcoin holdings and makes sizable profits, other companies that began buying a while ago are still holding.
For example, business intelligence company MicroStrategy (Nasdaq: MSTR) began buying bitcoin in August last year. It has held its crypto holdings for some time without selling.
Additionally, Square, Inc. (NYSE: SQ) is another company that has not yet sold its bitcoin holdings.