It turns out Tesla isn’t just about electric cars, but they’re also cashing in on some serious Bitcoin profits too.
The e-car giant has reported $600 million profit from its Bitcoin stash in the fourth quarter of the year. How did they pull this off?
Thanks to a shiny new accounting rule from the Financial Accounting Standards Board that lets companies report their crypto holdings at current market prices.
Unrealized gains
Tesla first jumped into the Bitcoin pool back in 2021 but has since sold off about 75% of its crypto treasure.
As it stands now, the company’s remaining Bitcoin holdings are valued at nearly $1.1 billion.
And guess what? They didn’t sell any coins during the fourth quarter, which means that $600 million profit is all about those unrealized gains.
Sold it too early?
Now, if Tesla hadn’t sold off so much of its Bitcoin earlier, their holdings would be sitting pretty at around $2.4 billion today. But they sold, so here we are.
This Bitcoin boost has definitely brightened Tesla’s earnings report, and after a slight dip of over 2% on Wednesday, TSLA shares shot up more than 4% in pre-market trading.
But let’s not get too carried away, without those Bitcoin profits, Tesla would have missed the mark on their earnings per share estimates. So Bitcoin in fact saved the day.
Vires in numeris
If you strip out the $0.15 per share gain from the Bitcoin sale, Q4 EPS would have been only $0.58, which is a 25% miss compared to the expected $0.77.
Despite this, investors seem to be feeling quite optimistic about Tesla’s future. Promises of robotaxis and hopes for a sales recovery in 2025 are keeping spirits high, and the company also reassured everyone that plans for more affordable models are still on track for production in the first half of this year.
And don’t forget about Tesla’s Cybercab Robotaxi, which is expected to hit volume production next year.
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