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Tesla has sold 75% of its bitcoin holdings, electric car maker reveals
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https://www.msn.com/en-ca/money/topstori...a9714aba75        Tesla has sold 75% of its bitcoin holdings, electric car maker reveals
CBC/Radio-Canada - 2h ago

Profits at electric car maker Tesla fell by less than expected last quarter, boosted by price increases and the sale of three quarter's of the company's reserves of bitcoin.      The company revealed quarterly financial results on Wednesday evening, showing that revenues fell, even as the company booked a higher profit than analysts were expecting.

On a call to discuss the results with financial analysts, CEO Elon Musk said the company decided to sell about three quarters of its bitcoin holdings during the quarter, which added $936 million cash to its balance sheet.

Tesla started accepting bitcoin as payment for its products in early 2021, a major boost for the cryptocurrency. Within a few months, the company said while it was no longer acquring bitcoin, it had no plans to sell what it had.

But events in 2022 prompted a change of heart.

Musk said the sale was made to increase liquidity when Tesla was uncertain about how long the COVID lockdown in China would continue. Tesla has not sold any of its Dogecoin, which is another cryptocurrency Musk has expressed support for.

"This should be not taken as some verdict on bitcoin," he said, adding that Tesla was open to increasing its cryptocurrency holdings in the future.


Musk said that macroeconomic uncertainty might have some impact on demand for its electric vehicles, but when pressed for details by an analyst, he said the company did not have a demand problem but a production problem.  He said, "you can't kind of just raise prices to some arbitrarily high level because you pass the affordability boundary and then the demand falls off a cliff."

"[Prices] are frankly at embarrassing levels. But we've also had a lot of supply chain and production shocks and we've got crazy inflation," said Musk who has previously spoken of "a super bad feeling" about the economy.

Tesla has raised prices several times in the past year. For instance, the U.S. price of its Model Y long-range version is now $65,990, up more than 30 per cent since the start of 2021.

Musk said he expected inflation to start easing by the end of the year and most commodity prices to stabilize, which he hoped would allow Tesla to cut prices slightly.

Shares in Tesla were up about two per cent on Thursday. The shares are down about 40 per cent from their peak in November.

Chief financial officer Zachary Kirkhorn said Tesla was still pushing to reach 50 per cent growth in deliveries this year, adding that while the target had become more difficult, "it remains possible with strong execution."

Tesla's China factory ended the second quarter with a record monthly production level, after being forced to shut down due to COVID-19 related lockdowns.

Musk said new factories in Berlin and Texas aimed to produce 5,000 cars a week by the end of the year, adding that Berlin produced 1,000 cars a week in June. He had previously said the new factories were "gigantic money furnaces."

Morgan Stanley analysts said in a report after Tesla's earnings announcement that they see "near-term margin headwinds due to [new] challenges with ramping new production, particularly in Berlin."

Tesla executives acknowledged some continuing tightness in supplies of older-generation microchips, but said there were no major problems in supplies of chips and batteries barring unforeseen COVID-related shutdowns.

The EV maker posted an adjusted profit of $2.27 per share for the second quarter ended June versus analysts' consensus estimates of $1.81.

Automotive gross margin fell to 27.9 per cent, down from a year earlier and the preceding quarter.

Total revenue fell to $16.93 billion from $18.76 billion a quarter earlier, ending its streak of posting record revenue in recent quarters. Analysts expected $17.10 billion, according to Refinitiv.
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#2
What a prank! Lol
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