The Beginning of Tesla’s Bitcoin Journey
In February 2021, Tesla made a significant investment of $1.5 billion, acquiring around 43,000 BTC after a conversation between Elon Musk and Michael Saylor, CEO of MicroStrategy. Initially, Tesla even accepted Bitcoin as payment. However, due to concerns over its environmental impact, the company shifted its strategy and sold 75% of its holdings in Q2 2022, aiming to bolster its cash position amidst uncertainties caused by the COVID-19 pandemic.
Market Impact of Tesla’s Bitcoin Move
Tesla’s involvement with Bitcoin has had a noticeable impact on the market. After Elon Musk tweeted positively about Bitcoin and Tesla, the cryptocurrency reached an all-time high. Conversely, Elon’s anti-Bitcoin stance caused BTC to lose over 75% of its value.
MicroStrategy’s Bitcoin Portfolio Grows
In contrast to Tesla’s actions, MicroStrategy has continued to expand its Bitcoin holdings. As the publicly traded company with the largest BTC treasury, it currently holds 89,150 BTC worth $8.1 billion. MicroStrategy’s commitment to Bitcoin is underpinned by its co-founder and former CEO, Michael Saylor.
Tesla’s Q4 2023 Earnings Report
Tesla’s latest earnings report, published on Wednesday, resulted in a 14% drop in share price due to weak auto revenue and warnings of slower growth in 2024. While the report showed a marginal increase in total revenue compared to the previous year, operating margin dipped to 8.2%. The automaker acknowledged the challenges it faced, which is not favorable news for investors.
Despite these setbacks, Tesla’s net income more than doubled in the quarter, largely attributed to a significant noncash tax benefit. Looking ahead, the company is keen on launching its “next-generation vehicle” in Texas, which may impact its vehicle volume growth in 2024.
Elon Musk’s Aspiration for Influence in Tesla
During the earnings call, Elon Musk responded to questions about his desire to own 25% of Tesla, expressing an interest in potentially shifting towards a dual-class share structure. Musk voiced concerns about institutional shareholder services and the presence of activists within those organizations. He remarked, “If we could do a dual-class stock, that would be ideal. I want to have enough to be influential.”
Tesla’s New Ventures: AI, Robotics, and the Cybertruck
Tesla’s venture into AI and robotics has brought forth significant developments. With the launch of x.AI, a startup owned by Elon Musk but independent from Tesla, and the creation of the humanoid robot named Optimus, the company is undergoing a substantial transformation. Musk has high expectations for Optimus, believing it has the potential to surpass the combined value of everything else Tesla offers. Another pivotal moment for the automaker is the introduction of the Cybertruck to the market, with a projected production capacity of over 125,000 vehicles annually.
In Q2 2022, Tesla sold 75% of its BTC holdings for $936 million. Had the selling occurred after April 28, the company would have realized a higher return than its initial investment two years ago.