Tesla Unveils Bitcoin Holdings and Profit from BTC Sale
Tesla has revealed that it still holds digital assets worth approximately USD 222 million, despite previously stating that it had sold 75 percent of the bitcoin it held on its balance sheet. The sale resulted in a USD 64 million profit for the company.
Tesla's most recent bitcoin (BTC) sale and remaining holdings were revealed in a filing with the US Securities and Exchange Commission (SEC) on Monday.
The sale netted Tesla a total of USD 936 million in the second quarter, according to the filing. The company also recorded a USD 170 million impairment on its remaining holdings.
According to the filing, as of June 30 this year, the company had digital assets with a "fair market value" of USD 222 million. It did not specify whether all of the digital assets it held were in bitcoin, but the vast majority are.
Tesla executives have revealed that the company also owns some dogecoin (DOGE), though the company has never publicly stated that it purchased the meme coin. However, the company does accept DOGE as payment for some of its merchandise.
The details of the bitcoin sale revealed in the filing are consistent with comments made by Tesla's chief financial officer Zachary Kirkhorn during the company's second-quarter earnings call, in which he stated that Tesla had sold 75 percent of its bitcoin "for a realized gain."
During the same call, CEO Elon Musk assured the market that the sale was not motivated by a loss of faith in bitcoin, but rather by the company's desire for a stronger cash position. He went on to say that Tesla is "certainly open" to increasing its bitcoin position in the future.
Tesla initially purchased USD 1.5 billion in bitcoin during the first quarter of 2021. The company then reduced its bitcoin holdings by 10%, resulting in a USD 272 million profit. Following that, Tesla made no changes to its bitcoin holdings until the second quarter of this year, when it sold the previously stated 75% of its original bitcoin holding.
The company never disclosed the price at which it purchased bitcoin or the price at which it sold it. However, various sources estimated the selling price last quarter to be around USD 29,000.
Tesla reiterated in its most recent filing that it may increase or decrease its holdings of digital assets "at any time based on the needs of the business and our view of the market and environmental conditions."
The company does not account for bitcoin as a mark-to-market asset, which means that fluctuations in the bitcoin price only affect earnings when it is bought or sold.