Tag: Tesla

Tesla’s Bitcoin Folies

Over $200 Billion Market Cap Loss

Tesla Doubles Down on Stupid

On February 8, 2021, with their stock at about $860/share, Tesla disclosed in an SEC filing that they had purchased $1.5 billion in bitcoin and would soon be accepting BTC as a form of payment. As I write this on 3/24/21, the share price is down to about $640, a loss of over 25% in less than 7 weeks.

While Bitcoin owners were happy, many Tesla stockholders thought the move was inconsistent with Tesla’s Environmental Mission and would actually lead to more fossil fuel use as the price of bitcoin goes up.

A Tesla stockholder posting on the Tesla Motors Club Forum

 the first thing I thought of is how bitcoin wipes out all the current and possibly future CO2 savings of the Tesla fleet

CertLive, Tesla Investor
Others Slam Tesla
  • Rueters: Elon Musk wants clean power. But Tesla’s carrying bitcoin’s dirty baggage
  • Matt Elston: Elon Musk: a Reverse Psychology Genius?
  • Axios: Tesla faces scrutiny over carbon costs of bitcoin and vehicle range
  • Green Car Report: How will Tesla’s bitcoin investment affect its carbon footprint?
  • The Verge: Tesla’s $1.5 billion bitcoin purchase clashes with its environmental aspirations
  • Medium: Buying a Tesla in Bitcoins cancels 1/3 of the CO2 savings for its whole lifetime
  • Yahoo/Bank of America: Tesla’s bitcoin investment has carbon footprint of 1.8 million cars

The list goes on and on with The New York Times, Washington Post, Financial Times and many others questioning Musk’s btc move.

Musk Sticks with Bitcoin even after Backlash

So, did Musk and Tesla make the right move in backing bitcoin? Is it important for Tesla to have an environmentally friendly image, or is it more important to diversify their cash holdings? Tesla’s ~$200 billion market capitalization loss since publicly disclosing their bitcoin position would indicate that it is important for corporations to be in touch with their customers’ and shareholder preferences. Blackrock, the world’s largest money manager, has repeatedly emphasized the surge in sustainability investing, views climate change as an investment risk and is calling for companies to disclose how their business model is compatible with a net zero economy. Musk and other CEOs should pay attention!

Coming Soon
Should Tesla buy Bitcoin & Gold as part of its cash management strategy?
Should Tesla buy Bitcoin & Gold as part of its cash management strategy?
Should Tesla buy Bitcoin & Gold as part of its cash management strategy?

Elon Musk: a Reverse Psychology Genius?

Less than a year ago, Elon Musk tweeted “Tesla stock price is too high imo”

The stock quickly dropped 10% and even Tesla’s biggest Fanboys were asking him to shut up. The stock is up 5X since and all has been forgiven.

In an SEC filing Monday, Tesla stated “we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”

While TSLA initially popped Monday along with BTC, both are down today as Reuters published “Elon Musk wants clean power. But Tesla’s carrying bitcoin’s dirty baggage“

So is Musk clueless about the irony of the world’s most well know “Green” Company endorsing gold mining and the world’s most energy intensive and greenhouse gas emitting cryptocurrency? Let’s hope he has a trick up is sleeve…maybe in a few months he will announce that Tesla has switched to more planet friendly proof of stake crypto (like Cardano or Nano), or better yet, has gone for a proof of impact currency like Solar Coin. To save face, Elon can even tweet about how much attention he brought to the negative environmental impacts of bitcoin.