Topic: Did tesla's $1.5 billion bitcoin purchase negatively affect their stock price (Read 607 times)

The fact that people buy from these prices today because they believe it will be even higher in the future shows how Tesla stock buyers are not great at investment methods but they do believe in the company's future, so it evens each other out. Normally Tesla stocks should not worth this much, it should worth less compared to what it is doing today, so today's price is not reflecting on today's finances for the company that's for sure.

However people think that in the future it's going to worth even more than this, as long as electric vehicle line keeps going strong like this and they keep being sold out constantly that means the price of the stock will keep going up, and that is proven on the finances as well, it always grows bigger and bigger, so yes in the future it will be a lot higher but today it is overvalued so it's a very trick situation.

I am not a hater of Tesla/Elon, but I have serious doubts regarding the viability of such crazy valuations. Tesla is now worth $578 trillion (as per the latest market cap from the NASDAQ exchange), but their annual revenue is only around 1/100th of this number. The P/E ratio is 939. Obviously I understand that P/E should be high for new innovations, but the ratio of almost a thousand? It makes me uncomfortable.

That is how haters say when they both dislike bitcoin and Elon Musk. Nothing needs to deal with these people. Apparently, Tesla stocks need to have a correction since it has gone way too far this year and the previous year. It is understandable. Furthermore, the stock price does not affect the operation of the whole business. He is doing great work for both Tesla and SpaceX.  Bezos once said that he does not care about the stock price because if stocks price increase by 30%, it does not mean that we are 30% smarter

Yesterday, there was a tweet from John Pompliano (@JohnPompliano). It goes like this:


However, IMO he missed the most important factor. If someone had purchased Bitcoin worth $77,000 in 2012, then he/she would be having BTC worth $800 million right now. So which one is better? Investing in Tesla stock, or directly investing in Bitcoin? Statistics tells us that the latter option is better.

No way. What was actually happening to Tesla stock was the normal market correction after the price pump. If you look at the Tesla stock price chart for the last 6 months you may notice a huge uptrend so why bother with the little downtrend? just because they invested in bitcoin? That's is a bad call. Even before Tesla invested in Bitcoin they have uptrends and downtrends, so what do you expect? you expect Tesla stocks to go up all the time just because they invested in bitcoin? Oh, come on, you need to think again. the stock market doesn't work like that.

As of now, Tesla is having a virtual monopoly in the mid-range and high-range EV sector and that explains the high valuation. There is no doubt that a P/E of more than 1,000 looks hyperinflated. Even during the dot com boom during the late 90s, most of the tech stocks had a P/E ratio of lower than this. But those who invest in Tesla believe that EV sector will replace gasoline-run vehicles in the near future. As per their expectations, Tesla revenues are going to jump by 10x-20x during the next 10 years (if I am not wrong, then they had ~80% growth in 2020).

Yes, there is no guarantees, but it's a fact Tesla is growing and getting more important each new year very focused in the future, also working with sustainable sources of energy and space exploration, while another automotive companies look more stagnant. Furthermore Tesla isn't disponible in every corner of the world yet, what means they are still in expansion and didn't reach to its full potential yet, but it's really promising.
I think investors wouldn't be fool to put so much money in Tesla if there wasn't a good reason for that.

And electric vehicles are just a part of their business.

There's no guarantee an over-pried stock like Tesla will recover from the mania-induced highs.  Tesla is worth more than Ford, Honda, BMW, GM, Daimler, Volkswagen, and Toyota combined and yet produced a tiny, tiny fraction of the cars.  Tesla's revenues was about 30 billion last year while the revenue of the other 7 car makers was 1.1 trillion.  There's absolutely no way Tesla is worth this price, or will ever grow into this valuation.  It's still priced like it will be the only EV producer forever.

With Tesla's bitcoin purchase I believe they incentivized investors around to also buy bitcoins. Naturally, potential Tesla's investors, those who are sympathetic to their ideas might have followed this incentive, putting their funds in bitcoin and letting the company's stocks aside a little bit. But this fall in stocks price is temporary. Tesla is a great innovative company and will recover soon.

No ,i dont buy this theory because Tesla stock was not the only one tanking at the time. All the tech sector stocks started to tank at the same day. Although  this was huge news for crypto and BTC , the amount for Tesla's treasury was not that high to initiate some kind of negative response.

In a way, that argument is correct. The Bitcoin holdings (even at current exchange rates) represent less than 0.5% of the market cap of Tesla. Even if we take the volume of cash reserves, the $3 billion worth of coins only constitute a small fraction. Tesla is an EV manufacturer and unlike the case with Microstrategy, it's share price and market fundamentals will be decided by the performance of its EV business.

Today there is a very positive trend in changing the priorities of many motorists. Very often, car enthusiasts buy electronic cars, which are much cheaper to maintain and maintain. It is Tesla that is the brand that sits in the middle between expensive and cheap cars.But the biggest problem with Tesla cars is the build quality. The fact that stock prices have been falling until today may be primarily the influence of competition in the market, but nevertheless it is worth mentioning the fact that after investing in bitcoin, the cryptocurrency rate has very much pulled ahead, but after a time of practically simultaneously Tesla shares and Bitcoin fell in price by several positions, and today Tesla shares and the Bitcoin rate are recovering in price almost simultaneously.

Agreed I dont think they are tied together its just tesla was probably a bit overvalued there was going to be a correction eventually and just because their decline was just a coincidence probably

The bitcoin investment just isn't a needle mover for Tesla due to how small it is compared to the overall market cap of the company.  Bitcoin could triple and it would mean next to nothing for the company's overall value and it could go to 0 and have the same relative non-effect.  It's not like Microstrategy, the marketcap of which is predominately bitcoin-related at this point.

Agree, Bitcoin is not negative reasons that affect Tesla's stock value because the budget for investing in bitcoin is not small and a large company will inevitably require voting on such decisions, making the investment proves that shareholders accept and support, Covid had a significant influence on Tesla, and the decision to make money online was not wrong. Even now, this plan is still worthy as it may have reduced some of the pressure on stock prices to drop, plague, the change in president and economic war are probably the leading causes of stock devaluation

If I am not wrong, the net worth of BTC held by Tesla is around $3 billion now, which represents a 100% appreciation from their purchase price in January 2021. It is difficult to quote an exact figure, because Tesla hasn't released those numbers. But we can make assumption based on the date of their purchase. Some of the shareholders are angry, because they think that Elon made this decision (to purchase BTC) without consulting them.

Despite the criticism of Tesla for buying $ 1.5 Billion of Bitcoin, I think the main reason for the decline in Tesla's stock price is not because Tesla
bought Bitcoin. Especially after Tesla bought Bitcoin in February, Bitcoin price continues to rise until now. Tesla investors should have known that
Tesla's steps were not wrong. In my opinion, Tesla's stock price has decreased because from the start it was overvalued, we can see that in
the past year, the increase in Tesla's stock price has increased significantly. So I don't agree that what Tesla did by buying Bitcoin had a negative
effect on their stock price.

imagine that 'supplychain costs are $1.5m/quarter'
so they have $6bill a year of 'cashflow' to cover those costs for the year

well unable to buy stuff in Q3 means your hanging onto $1.5b that should have been used.
this can cause issues with:
a. seeking 2021 investment. as having cash unspent wont attract people to want to hand more over
b. tax offices will see that $1.5b cash and take a nice bite out of it.

so the smart option.. invest $1.5b into something. so that you can treat it as a tax loss for 2020
yes when you exit the investment in the future you have to declare it as a taxable income. but atleast the amount taken will be less if you then get to spend the $1.5b on supplychain stuff before the end of 2021

yes many smart businesses want to declare losses for tax avoidance. a hit on the share price is less than the hit on the tax bill
share prices can recover. but you cant recover the tax taken

oh and by the way. elon bought btc in december. his primary share holders (board members) knew this..
the share price dip in february. was social drama triggered by a collection of many factors which swayed the smaller share holders away.
it was a combination of
the PUBLIC february news about investment.
the supplychain issues
tesla US cars are recalled due to faulty touch screen
tesla china cars recalled due to battery issues and unintended acceleration
other manufacturers launch their competitive cars

Unrealized gains absolutely figure into the stock price of a company. Berkshire has a public stock portfolio in the billions of dollars, and the stock price of Berkshire absolutely reflects the unrealized gains and losses of those assets.  It applies to every company.  Microstrategy has unrealized bitcoin gains, and MSTR's stock price rises and falls with the price of bitcoin because of how much they hold.  I agree with you that I don't see Tesla's investment in Bitcoin being enough to significantly move the needle for them when Bitcoin rises or falls, but investors still take into account Tesla's assets when make a valuation decision on the business.

But in reality it doesn't look like Tesla is doomed or anything. They are recovering little by little



and even if antiBitcoin investors are leaving them now, it looks like Tesla will perfectly survive without them. I even predict their rejoining the company later, when they become pro-Bitcoin like anybody else.

The US technically can't default on the debt because the Fed will just print as much money as is required to redeem the bonds.  So the risk of default is effectively zero.  The consequence is the dollar becomes devalued, but that's not a default.  Betrayal of the citizens, yes.  Default, no. 

All that aside, tech stocks will still trade inversely to treasury yields because that's just what they do.

No one anticipated a billion dollar investment from Tesla but why would JP Morgan be unhappy when they are catering business from cryptocurrency exchanges like Coinbase and they are planning to do business with the cryptocurrency market with their recent launch of crypto exposure basket.

The fluctuation in the price of Tesla stock is not new and if you look in the past two years the market rallied in both directions when Elon Musk says something and we will see the same in the future.

Did tesla's bitcoin investment negatively affect its stock price? Yes, it did.
Despite the fact that cryptocurrency and clean-oriented energy companies are an innovation that will do well in the future a lot of people criticized Tesla billion dollars investment in Bitcoin and I believe may lead to the exit of some TSLA investors who are antiBitcoin.

And those investors are right. Clean energy oriented companies is the future, there's no other choice, and while there can be scammers, taking advantage of the situation, Tesla is definitely not one of them.



When they were right, the analysts? They exist only because some people are unable to make decisions by themselves, and they want someone telling them what to do, even if that someone was wrong many times before.

During the last 18 months, TSLA share price has increased by almost 1500%. That shows the level of confidence that investors are having in this stock. Last time we saw similar P/E ratio was more than two decades ago, during the dot com bubble. Only history will tell whether TSLA is another bubble or not, but the Bitcoin purchase is not going to do any harm to them in the long term. And it doesn't matter what the analysts think about the purchase.

I think you are right, they(Tesla) are not day traders, after all. They just did the right move, but few companies have followed. Some people would rather lose money than admit that someone might be smarter than them.

As of Tesla's stock price, it's up by 8% since the OP's posting. I think they'll be alright.

Well.. a lot of people seems to be disgruntled by Elon's actions. But that is not going to matter much. And the news about the BTC purchase by Tesla came at just about the right time. There was a correction in Bitcoin prices from $41,000 to $33,000 and the news of Bitcoin purchase by Tesla took the prices from $33,000 to a new ATH of $58,000. BTW, I don't think that any one individual can influence the Tesla stock price. TSLA is having a market cap of $641 billion, and it is very difficult to manipulate a stock with such a huge market cap.

"Because I'm stupid" -Elon Musk.
Kiddings aside, I don't really think the bitcoin purchase is what ultimately caused the sudden depreciation in Tesla's stock value. Of course it is still at question, but a 1.9B purchase shouldn't be something that could really affect it, at least this quick and sudden.

Now what I really think about this is that the sudden drop in Tesla's stock price is due to the fact that the hype over electric vehicles is slowly dying out, Tesla hadn't released any major news as of yet and we aren't sure when will be the next time we hear from them with a news about the upcoming car that could revolutionize the vehicle industry.

You may be right but I was actually expecting it to happen long ago (I think Tesla investors stance is what delay the decision) ever since Elon claimed to be the new Dogecoin CEO (cause no genuine crypto enthusiast won't invest or support BTC), when Elon asked about how to perform large transactions to bitcoin.

Obviously, some centralized organization won't be happy about Tesla investment in Bitcoin but I am not sure if JP Morgan is currently included because I read that they are planning to create cryptocurrency exposure stock investment since they understand the traditional finance investment are losing to digital (crypto) finances.

That's exactly the reason, plus it doesn't matter if a stock like Tesla is shorted, I get it when they do it for GameStop because they are not as famous as they used to be and with the Steam and Epic Games and others we are talking about people buying digitally and not going out to buy games at shops, so it made sense to short that stock and people just wanted to make wall street lose money which is why it increased so much in the recent months.

However Tesla is not like that, they can make it drop as much as they can but the reality is that this is a company that is high-tech and better than any other car manufacturer when it comes to electric cars, all others are trying to build hybrid ones and even fully electric ones but none of them are as good as Tesla. So, this company will keep manufacturing cars and will keep selling it a lot as well.

Tesla's investment was unexpected. No one thought that they would take such a drastic step. Obviously some of the analysts (and banks such as JP Morgan) were very unhappy, as Telsa had gone against their advice. All sort of scare stories were spread in the immediate aftermath. And the crash in Tesla share price was like a shot in the arm for these skeptics. But I guess now most of them have crawled back to their caves.

This was going to happen because Tesla shares were overpriced due to Musk riding the market accordingly and after his statement of Bitcoin prices his wealth and Tesla share prices both fell drastically pushing him down on second position of richest man in earth.Tesla market cap fell from $864 to $574 billion with stock prices plunging roughly 33%.There is a market trend these days of people blindly investing and then selling in shares and cryptos based on market FUD' s which just happen with Tesla.Moreover Nasdaq was down by 2.3% with Apple, Microsoft shares also down but Tesla faced huge loss.They gained profit from Bitcoin investment and loss from their shares.Wait and watch for the next move.

This is the nature of human psychology, they are considered to complain or make some excuses when things are not going in a specified way that will please them and more this should be expected from Bitcoin haters (especially those that are not happy with Elon $1.5 Billion investment in Bitcoin).
The truth is that people are always like that but que sera sera.

When the Tesla stock price was going down a few days back, the Bitcoin haters were claiming that it is due to the investment in Bitcoin. And yesterday, the stock price went up by 20% in a single day. So would these people now say that the $120 billion+ increase in the Tesla market cap in 24-hour duration is due to rising exchange rates of Bitcoin? I know that they are not going to agree. Just pointing out the fact that they look for convenient excuses to blame BTC. Tesla stock price was going down because it was overvalued. And yet, some people were blaming BTC for the crash.

Or maybe most of investors just think that with tesla's investment to bitcoin it could add more risk to the company's portfolio. It's all just wild hunch though but I don't think by investing in bitcoin it could ever make Tesla goes bankrupt but I think it's gonna be quite the opposite, remember when spaceX a company of elon musk also deemed to be a huge failure but it turns big rn.

That is the theory anyway, as time goes on the stock will recover and grow. I don't think that the 1.5 billion worth of bitcoin purchase isn't the reason that the prices of Tesla stock is going down, remember those pesky devils called Hedge Fund Managers, Tesla is one of the shorted stocks and they have the money to do those manipulations, I think Elon was vocal about hedge fund dogs shorting their stocks back then, I don't exactly remember the date.

I don't think so. The long term effect on the stock price should be positive. At the moment everything looks like tesla is going to make a nice profit with their bitcoin investment. We all know that Tesla cars are being hyped for years now, so there are a lot of orders for new cars. With all that cash being available at Tesla there must be some investment. Why not park it in a crypto currency? I think it was a good move by Elon Musk.

If they cash out now, then they need to pay a short term capital gains tax of 37% on the gains. That means that out of the $1 billion gain, only $630 million will be going to the company reserves. Anyway, being an institutional investor, I don't think that Tesla has any plan to sell their BTC in the immediate term. They are accumulating the coins for very long-term, possibly for more than 10 years.

In Tesla's open-minded business strategy and led by Elon's direction, I don't think they'll let their stock deficit down, as they continue to increase their stake in passive revenue.  buy bitcoin.  It can be understood that they increase active revenue and lower stock rates.
 
In addition, their revenue from electric cars will fill the deficit over time as their bitcoin-based profits can go down.  I think they were well prepared to strike a balance before spending 1.5 billion on bitcoin.

That would be so only if Tesla cashed out all their BTC at $50k+, which is hardly the case. Investors fear of the possible crash, and it's no wonder because we keep seeing negative opinions predicting "the burst of the bubble". Overall, institutional demand for Bitcoin wasn't increasing since Tesla's big purchase ... Well, maybe until today(see the latest news), so if Tesla's stock crashing was related to the $1.5 billion buy, then the things can start improving for them from now on.

Tesla hasn't sold their coins, so the profits are "unrealized". So on paper, the profit of $1 billion is there. But as long as it is not realized, this transaction will not be having much impact on the stock prices. Also, $1 billion may sound a lot. But considering the market cap of Tesla, it is a very small amount (less than 0.2% of the market cap). So whatever price movements we are witnessing may not be having anything to do with the BTC purchase.

And there are some who have advised Tesla to dump their Bitcoins in order for the stocks to recover. For me, there are some factors behind the dump of Tesla stocks because of purchasing $1.5 billion worth of Bitcoin. In my opinion, either the whales are “playing the game to buy more at their target discount price” where some Tesla holders are going to panic sell, or there are Tesla stock holders who aren’t fans of Bitcoin and start selling or dumping them because of Tesla’s interest on it. That’s just my opinion though.

I was expecting to the some positive effect in the stock price of Tesla after buying this huge amount of bitcoins and start investing on it. I'n not into the stocks but maybe the sock price is gonna rise soon hugely because the amount of profit Tesla got after buying the bitcoins is even more than the money they earn for selling their electric vehicles during the entire of the last year. I believe we should the effect on long term after a few years/months.

The recent fall in Tesla stock price has nothing to do with the Bitcoin purchase. Tesla was overpriced as hell (it is still over priced at current P/E levels) and it doesn't surprise me that the price fell. In fact I wonder why the prices didn't fell earlier. The immediate reason why the stock prices fall may be due to the entry of new competitors to Tesla in the EV sector. Also, there are announcements made by some of the well known vehicle manufacturers regarding entry in to the EV sector.

I honestly think it's just the investors' way of thinking that bitcoin could somehow add some major risk to the company but honestly that doesn't make sense and doesn't feel like an adequate reasoning for their dumping.
If buying btc is truly their reason of dumping tesla stocks massively then they better off withdrawing all their investment from tesla any way, a company like tesla that's high tech should also try out some advanced technology like blockchain otherwise they won't get ahead.

This is strange. Ideally investors should not fall in to this trap. Bond yields are rising because the government is taking more and more loans to cover the rising federal debt. In absolute terms, the returns may be increasing. But the chances of default is going up and the purchasing power of US Dollar is declining. However, purchasing treasury bonds may be an attractive option in the short term, and I can't blame corporations for going for it.

That's absolutely not what happened. Board members are insiders and can't just sell their shares without making filings with the SEC about it. Since this didn't happen, we know that this "theory" is 100% wrong. Tesla is pulling back because all tech stocks are pulling back as treasury yields rise. There is an inverse relationship between the 10 year treasury yield and tech stocks.

That can be one of the possibilities. But let's not forget the fact that a few months before, Elon himself claimed that the Tesla stocks are overpriced. That probably did more damage than any of the other factors. There may be other factors in play as well. Joe Biden has taken some controversial steps ever since he took office. That might have had an impact on the stock market, and specifically on overpriced stocks such as TSLA.

There are a lot of things to consider here but ruling out several factors like Tesla was doing good financially and they were just recently at their ATH my bet is on that there is a group of stockholders/board members that expressed their opposition against their cash reserves being invested in Bitcoin when they weren't heard from it they just simply sold off their shares, but don't quote me on this one I'm just giving you some possibilities on why a financially well performing company is suddenly going down in value. If we rule out the controversy and all chances are people just took the profit that's why Tesla shares are doing down and this is common on stocks that are up on their ATH same as cryptocurrencies.

I know it's stupid but for some investors their pride and stubbornness is more important than common sense. If I saw that a CEO of a company that I'm holding can thing outside the box, I'd be even more confident. I'm a guy who likes to see positive numbers, no matter where they come from. I'm not a guy who would judge a company based on whether they portray themselves environmentally friendly or not, but I can understand why a clean energy freak who spent 100k USD on his electric car and another 100k on solar panels would feel betrayed by Elon who is now investing in Bitcoin. People are strange and irrational most of the time so a bold move like that could scare them.

Stock prices technically move like bitcoin as well, it is all about supply and demand which means if people do not want the stock they can sell and if they like it they can buy it, the only difference is that it is a company and makes a profit or a loss so you should probably know about what is going on with the finances of it and that is why there is a calculation and valuation of that company.

Moreover, if I was guessing I would say this is why it could be going down after they bought and the price of bitcoin dropped at the same time as well which made people sell it I suppose. However the company itself makes absolutely no problem at all and that is why I believe the fall is not forever since it would be easy to see that company is not making any loss at all.

One thing you gotta keep in mind about Tesla is Elon's loooong history of over promising and under delivering on those promises. Promising Tesla would never need to raise capital again, then doing secondary issues; missing production targets regularly; battery day letdowns; "shatterproof" cyber truck windows, etc.  And on the cybertruck, Ill be shocked if that thing actually sells well. It's ugly as sin and I don't see that many people into the aesthetics of that truck. It was buzz worthy because of how weird it looked, not convinced that will translate into robust sales.

Oh yeah, of course, at times correlation reflects nothing but coincidence. And, yes, I guess a huge portion of Tesla's overall stock movement is simply brought about by the larger sentiment of the entire market. Furthermore, just like "the entire market is overvalued right now," I'm afraid so are Tesla cars.

However, it cannot be denied that Tesla's Bitcoin purchase has contributed to its negative movement in the stock market. Some investors have actually openly voiced over their disappointment over Tesla's Bitcoin purchase, along with their decision to sell their shares of the company.

But, on the other hand, it is my observation that things were exaggerated a lot when business/finance articles seem to solely attributed Tesla's negative movement in stocks to its decision to purchase Bitcoin. That to me is nonsense. Just like when an analyst advised that "Tesla should sell its Bitcoin and buy back shares to create 'Positive Momentum.'"^[1] I think they're just firing out one criticism after another purely out of spite of Bitcoin. I mean, they're just salty! Zzzzz.

[1] https://finance.yahoo.com/news/tesla-sell-bitcoin-buy-back-050117982.html

Currently Tesla shares have fallen at the same time as the correction of Bitcoin, some blame him for having said on twitter that Bitcoin and eth had their price very high, about approximately 27 billion dollars have calculated the losses of Elon Musk, but I think it must withstand this storm, because a new Bitcoin pump may come, anything is possible.

But still, he is still the 2nd richest in the world according to Bloomberg.

Had he been busy talking too much about cryptocurrencies and forgot about his company investors. 

There may be a chance that some did pull out because of what he did.
And it cost him this negative effect for their stock price.
I think he foresaw this to happen also and was prepared for the consequences.
His financial advisors might have given him all the opinions about it and somehow it will all be realized in the future.

Tesla has long been a favorable target for investors who seek to benefit from falling stock prices. If successful short sellers can make the difference between selling and buying prices but the recent incident with video game retailer shares such as rising share prices could also be a serious mistake for businesses bitcoin business is also on the rise their net worth has also increased and decreased with the recent bitcoin prices. Tesla revealed last month that its cryptocurrency revenue on its balance sheet was $ 1.5 billion  fortune hit 15 billion just two weeks later he then said on twitter that the price of bitcoin and other cryptocurrencies seemed to be higher.

Tesla is heavily overvalued and there is no doubt about it. One year back, the stock was trading at around $100, and by this January the prices had increased to $880. The stock price increased by almost 9 times, but there was no similar increase in the revenue or net profit. At one point, Tesla had a P/E close to 1,700 which is perhaps the maximum level for any stock with a market cap above $10 billion.

I honestly don't think that is the case.

BTC prices have only moved in the positive direction since Tesla's announcement. It makes no sense for that portion of Tesla's $1.5b holdings (which is minuscule compared to their half a trillion market cap) would result in a 30% correction in their common stock.

I think people are just starting to realise that Tesla is insanely overvalued right now with a P/E ratio of nearly 1000 (for context, average P/E is usually about 20, overvalued is around 30). There is simply no stable cash flow to justify this absurd rally.

No doubt, and it seems like there's a huge difference between Tesla investors and MicroStrategy investors--the latter seem to like the fact that their company purchased a massive amount of bitcoin.

But just based on that graph (which is a very short timeline), I'm not completely convinced that Tesla's bitcoin purchase is responsible for their stock price dipping.  The entire market is overvalued right now, and I'm kind of surprised that more stocks aren't starting to slide.  Plus, as we all know, correlation doesn't mean causation.

Teslas do 0 to 60 mph performance times ranging from 2.5 seconds to 4 seconds. Teslas are faster than supercars like ferraris and lamborghinis which are far more expensive.

Teslas offer supercar performance in an EV with quality craftsmanship and dependability on top of high fuel efficiency, while being good for the environment and helping end dependance on fossil fuels. Futuristic extras like AI autopilot technology -- definitely a plus. On paper analysts trend towards looking only at price and range, which prevents them from seeing the big picture.

I watched presentations on tesla's planned tech unveilings for 2022 and have to say they're impressive. Could be game changing for EV markets and battery manufacturing. They managed to reduce if not eliminate dependance on cobalt for their batteries which was one area EVs were criticized for due to cobalt mining industries being dependant upon child and slave labor in africa.

I don't know how much impact the new technology will have on Tesla sales. Right now, the cars from Tesla costs at least 4-5 times that of a gasoline-run vehicle with the same specs. People go for Tesla, because it has become a status symbol, or because they are concerned about global warming and pollution. And even $30K is still a lot. You can purchase a Chevrolet Sonic or Hyundai Accent for less than half of that price.

Tesla made a bigger profit buying bitcoin than the profit made from their entire operation. Hilarious!

Reminds me of space x venturing into the satellite internet business (starlink) when they realized satellite ISPs have bigger profit margins than space x itself did.



I think tesla's stock value surged after their recent presentation unveiling new technology scheduled to be rolled out in 2022. They plan to license their new EV technology to global automakers in addition to utilizing it in house. They may also have a tesla EV they plan to market at $20k to $30k in 2022. Which could represent the price range many would like to buy a tesla but previously couldn't afford it. There is also the tesla cybertruck which is due out in 2022.

We'll see how it goes long-term.

Agreed 100%. Absolutely spot on. Apple is still generating huge amounts of profits and compared to that it's market capitalization is not very high. Tesla on the other hand is an inflated balloon. It's valuation is so high, because the investors assume that it's revenues will jump by 10x or 25x in the next few years. They have the momentum with them, but competition is getting tougher in the EV sector.

Yes, the bitcoin purchase has a negative effect, but it's just one of many reasons why Tesla's stock price plummets. The stock market relies more on the company's bottom line, and Tesla missed it early this year, and based on the price action, investors think they will not deliver again. It's like when you give money to someone to work, but he doesn't deliver and use a small portion of the money to speculate.

Apple has a two trillion dollar market cap because it generates gobs of cash every quarter, and they don't generate that much cash with a mediocre product.  If it was truly mediocre, they would be replaced by anyone doing it better, but the fact remains their ecosystem as a whole blows all others out of the water.  Despite the two trillion dollar market cap, the PE ratio is only in the very low 30s, which is pretty par for tech companies.  Tesla on the other hand is priced like there will never be competition for electric vehicles, despite the fact that there already is and it's only going to get worse as every major automaker is pledging to be fully electric in the coming years. With Tesla's poor quality issues currently (car fires, software update glitches, hardware failures and Elon's dismissive attitude saying people shouldn't expect the hardware to last the life of the car anyway) Tesla's higher end models will be second fiddle to Porsche, Audi, Lexus and other luxury automakers. Tesla had first mover advantage in scaling electric vehicles in a meaningful way first, but very soon that will be the only thing that differentiates them from other luxury automakers and then it will rest on quality alone.

Doesn't matter, look at Apple, they clearly have a mediocre and expensive product but they have a trillion dollar market cap. General customer doesn't care about quality, you have to take note that not everyone is rich or financially healthy, if the market introduces something cheaper despite quality or if the product can make you look like you have a place in high society, the general population will bite it.

If their products are really good, then they don't need to bother about competition. I guess the issue is that investors are concerned about the high P/E ratio of the TSLA stock. The ratio currently stands at 975, and it was as high as 1,700 a few months back. They are still having a market cap of $600 billion, which sounds a bit high, considering the fact that their net annual income is less than $1 billion.

No, at current prices the stake is likely only up $600m.  I say "likely" because I haven't been able to find any place where Tesla disclosed how many bitcoins they bought.  Their SEC filing only disclosed that they bought $1.5B worth in January 2021.  I've seen speculation that the price was $33,000, but nobody knows for sure.  If it was $33,000, that would give you a $600m unrealized gain at current prices, which is considerably less than what you posted.

As for why this could negatively impact Tesla, it's because investors don't want the sideshow of Bitcoin interfering with the company when it should be focusing on growth and solving its numerous quality problems. Making money on bitcoin is not a business model, the company needs to build and sell good cars to make money.

Tesla's stock decline is because the company was insanely overvalued to the point of absurdity. It's valued like it's going to be the only company that ever produces electric vehicles. Once you dispel that notion as obviously wrong, it's easy to see how overvalued the company is.  Aside from valuation, all tech stocks are getting hammered as treasury yields rise right now.  That's not specific to Tesla, it's pretty much across the board.  I wouldn't say that Tesla buying bitcoin is why it's down, but the sideshow it creates isn't doing the company any favors.

AFAIK it doesn't have anything to do with the purchase, there was a rival company named Rivian that was preparing their IPO as we all know, competition means that you have to lower your prices because you need to attract customers which in turn will cause your revenue to go down and then your stock prices, in fact I think the purchase actually made a positive impact on the stock prices of Tesla, as @Sithara007 said, there was a 1 billion profit.

Has nobody noticed how degen Elon can be with his tweets about crypto. The guy is having fun behaving like some shill with memes about crypto and especially, DOGE. This is typical of him though. I assume he has only started to seriously look into the technology and the almost disruptive, irreverent nature of crypto. He loves that vibe. And he sends out memes about "We hate SEC".

He is obviously Earth's greatest genius at present but he is not immune to having some fun in his idiosyncratic ways. So is it any surprise that the behavior may have rattled a few old-school investors?

I don't understand how the purchase can negatively affect their stock price, when they received a huge profit from the transaction. The value of the coins purchased by Tesla in January 2021 stands at around $2.5 billion now, which represents a profit of $1 billion. And more importantly, this is more than the profit that Telsa earned by selling their electric vehicles for the entire year of 2020.

Apparently, there were criticisms against Tesla for buying more than a billion USD worth of Bitcoin. It might have affected their stock one way or another.

The criticisms are coming from all sides. Of course, some from Wall Street would consider such a financial move a silly one or at least a very risky one, considering that Bitcoin is still being treated as a foreign and unpredictable asset to them, a young emerging one which is too volatile.

Another criticism is directed at Tesla being the poster boy of clean energy, the standard bearer of electric cars, the well-loved technology for being sensitive to the urgent environmental issue of climate change. An investment into an energy-gobbling Bitcoin made a lot frown.

All this and other reasons must have pushed investors to sell Tesla stocks.

However, at the end of the day, if the primary goal was an increase in worth or to make profit, it seems Tesla has made the best move. Around a billion in profit was already registered from its Bitcoin investment after only a relatively short period of time. And it appears Tesla has made more profit from its Bitcoin investment than from its 2020 EV car sales. ^[1]

But all these criticisms are nothing new and nothing strange. It seems to me the big traditional players won't just allow anybody to jump into the other side unscathed. They would never make it easy for billions to enter into Bitcoin, their nemesis. They would certainly put up a fight. No wonder why MicroStrategy’s stock was suddenly downgraded to sell rating by Citigroup after actual Bitcoin purchases were made.

[1] https://www.cnbc.com/2021/02/22/tesla-has-made-1-billion-profit-on-its-bitcoin-investment-analyst.html#:~:text=Menu-,Tesla%20has%20made%20about%20%241%20billion%20in,its%20bitcoin%20investment%2C%20analyst%20estimates&text=Tesla%20has%20made%20roughly%20%241,analyst%20at%20Wedbush%20Securities%20estimated.

A controversial topic.  

Some claim Elon Musk and tesla are being battered for allocating $1.5 billion in assets in BTC. Others say tesla's stock crashing post february 8th is an amazing coincidence entirely unrelated to that move.

One of the more tangible pieces of evidence emerging are supply chain disruptions freezing automotive factory lines.


It is interesting to note other automakers like ford and toyota have not experienced the massive stock devaluation tesla has. Ford's stock price is actually higher today than it was feb 8th. Internal combustion engine manufacturers aren't as reliant upon rare earth metals the way that EV makers like tesla are. Perhaps this discrepansy can be explained by regional differences and material demands.

Long story short, your mission should you choose to accept it. How would you explain tesla's stock movements from february 8th to the present. There are always many threads and posts being made on this forum about trading. Many lessons in historical markets translate to trading crypto and HODL. In that sense this topic could be worthwhile to discuss.

Was pornhub punished for its bitcoin adoption. Is tesla being punished now. Or were there other factors, history and forces in play which prove the conspiracy theories wrong.