The Texas-based electronic vehicle and the automotive company announced it had converted most of its Bitcoin purchases into currency following billions of dollars worth of investments.
On Wednesday, Tesla released its second-quarter earnings statement, confirming that the company had converted up to three-fourths of its Bitcoin investments into fiat currency. Tesla invested up to $1.5 billion in Bitcoin in early 2021, baking on its "long-term potential." But the digital currency saw a steep decline in value this year.
"As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency," Tesla announced via its second-quarter earnings statement this week, as per CNBC. The electric car maker confirmed that the sale of most of its Bitcoin added $936 million in cash to its balance sheet.
Tesla Sells Bitcoin Despite Elon Musk's Push in 2021
Following its $1.5 billion investment in the previous year, the company's fair market value of its Bitcoin holdings amounted to $2.48 billion in Quarter 1 of 2021. It ended the year with about $2 billion. Tesla did not disclose what price it sold most of its Bitcoin at or how large its impairment was, but Bitcoin began the second quarter at almost $46,000 and ended below $19,000.
Tesla CEO Elon Musk said during an earnings call on Wednesday that the reason for selling the company's Bitcoin following the $1.5 billion investment was because they were "uncertain as to when the Covid lockdowns in China would alleviate so it was important for us to maximize our cash position." He added, however, that the sale "should be not taken as some verdict on Bitcoin" and that the company was still open to adding to its crypto holdings in the future.
It appears that Musk's position has changed in just a year, as in 2021, the CEO and billionaire went hard on Bitcoin, claiming that the decision for the $1.5 billion investment was to become more flexible while diversifying and earning returns from its cash holdings. Tesla then sold 10% of its Bitcoin when its value increased, earning a $101 million profit in the period. But in May last year, Musk announced that Tesla would no longer accept Bitcoin for car purchases, citing the environmental impact of mining. He added that the company wouldn't be selling their Bitcoin.
Read Also : Tesla Cancels Three-Day Hiring Event in China This June-Will The Company Still Offer Jobs?
Tesla Impacted by China Production Disruptions But Report Increase in Revenue
The COVID surge in China had impacted Tesla's production as the company also dealt with increasing costs of scaling up its new plants in Texas and Germany. This resulted in a 57% increase in adjusted earnings per share in the last quarter, Financial Times reported. Its second-quarter results also earned a sigh of relief from executives, who were warned of production and supply issues due to external forces.
Tesla's revenue last quarter was revealed to be $16.9, a 42% increase from the previous year. But the figure was slightly lower than the $17.1 billion estimate by Wall Street. The company also reported an adjusted income of $2.6 billion in the second quarter, a decline from the $3.7 billion income earned during the first quarter, CNN revealed.
