Elon Musk’s Tesla reports $64M profit from Bitcoin sale
Electric car company disclosed in its 10-Q filing that it had earned a profit of $64 million from the sale of 75% of its bitcoin (BTC) holdings, which brought in $936 million in net revenue for the company in the second quarter.
The filing also revealed that the company had incurred an impairment of $170 million on its remaining holdings.
Financial impairment refers to the loss of a firm’s assets. An asset is deemed impaired if the projected benefits from it are less than its worth as filed in the account sheet.
Even though the company did not disclose the selling price for its bitcoin in the second quarter but analysts believe around $29,000 per bitcoin was sold, helping Tesla avoid a much more substantial impairment charge. Last week, Analyst Vetle Lunde estimated in a Twitter post that Tesla had sold 29,060 BTC at an average price of $32,209 in May.
Jaran Mellerud, an analyst at Arcane Research, took to Twitter to explain how large institutions sold 236,237 BTC in the last two months.
Michael Saylor, billionaire and co-founder of MicroStrategy, took to Twitter to explain about the math behind the selling of Bitcoin holdings.
In February, the firm purchased $1.5 billion worth of Bitcoin, which also lead to the surge in the price of Bitcoin in the market. Later in the first quarter, the firm reduced its Bitcoin holdings by 10 percent; this sale increased earnings by $272 million during that period.
In the same Twitter thread, Vetle Lunde explains , that since the collapse of LUNA- UST there has been significant market sell-offs.
