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The company Elon Musk made about $ 1 billion on Bitcoin investment of $ 1.5 billion.
Photos by Saul Martinez / Getty
Tesla’s recent news that it had invested $ 1.5 billion of its money into Bitcoin sparked a conversation about Wall Street about both the wisdom of the move and what it meant for Bitcoin as an asset. valid. While analysts and investors debated, the company Elon Musk made a billion cool cool on the trade.
Tesla
(ticker: TSLA) has bought $ 1.5 billion Bitcoin in its annual report submitted by the Securities and Exchange Commission on February 8. In addition to buying Bitcoin, Tesla said it was accepting the cryptocurrency digital as a means of payment for its vehicles.
The investment represented a small percentage of the company’s money, and a very small fraction of its market value, but the news seemed to make investors a little nervous. Tesla stock is down about 8% since its release. The
S&P 500
and
Dow Jones business average
they are up about 1% over the same race.
Even if investors are unsure about investing in Bitcoin – historically a highly volatile asset – it is hard to deny that the trade has worked well. for the pioneer of electric vehicles. “Tesla has so far made about $ 1 billion in profit over the past month from its Bitcoin investment, with the skyrocketing price of Bitcoin,” Wedbush analyst Dan Ives wrote in a research note Saturday.
Assuming Tesla was buying Bitcoin around the time it claimed earnings in the fourth quarter, the company might have paid about $ 33,000 per Bitcoin. Prices are up about 70% since then, to more than $ 57,000, turning Tesla’s $ 1.5 billion bet into a share of about $ 2.5 billion.
Tesla has reported about $ 969 million in net GAAP revenue over the past five quarters. (GAAP earnings are measured according to generally accepted accounting principles.) Tesla has made more money buying Bitcoin.
The billion-dollar gain, however, is very short of the approximately $ 65 billion that has been deducted from Tesla’s market capitalization since its publication. Other factors, beyond Bitcoin, affect the price of Tesla stock, but based on the early results, investors may have surpassed Bitcoin’s pull.
The digital currency now has a market value of over $ 1 trillion.
Ives ranks Tesla Hold shares and has a $ 950 price target for the stock, which closed Friday at $ 781.30.
Write to Al Root at [email protected]