Tesla Inc. sold most of its bitcoin, seemingly at a loss, but Chief Executive Elon Musk suggested Wednesday that executives would be willing to purchase more in the future while calling cryptocurrency “a side show to the side show.”
Tesla TSLA, +0.80% disclosed in a second-quarter earnings report late Wednesday that the electric-vehicle maker sold three-quarters of its bitcoin BTCUSD, -0.56% holdings last quarter. In a conference call, Musk said it was because he was “uncertain” about when COVID-related lockdowns in China would alleviate and sought to maximize Tesla’s cash position.
“We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict on bitcoin,” Musk told analysts on a call following Tesla’s results.
“It’s just that we were concerned about overall liquidity of the company given shutdowns in China,” Musk said, before adding that the company did not sell any of its dogecoin DOGEUSD, +0.55%.
See: Tesla stock rises after EV maker reports better-than-expected Q2 profit, jump in sales
Tesla bought about $1.5 billion worth of bitcoin early in 2021, likely at prices close to $38,000 for each coin, according to MarketWatch sister publication Barron’s, but quickly sold 10% of that total in a move executives characterized as proof of liquidity. Back-of-the-napkin math on the sale of $936 million worth of bitcoin in the second quarter suggests the company sold the coins for less than $29,000.
Impairment on the decline on Tesla’s remaining bitcoin resulted in an impairment of more than $100 million in the quarter, according to Chief Financial Officer Zachary Kirkhorn.
Tesla trumpeted its entry into the bitcoin frenzy by adding the titles “Technoking” to Musk and “Master of Coin” to Kirkhorn in March 2021. As Tesla announces the sale of most of its bitcoin Wednesday, though, Musk sounded less enthusiastic.
“Cryptocurrency is a side show to the side show,” he said in Wednesday’s conference call. “Cryptocurrency is not something we think about a lot.”
“The fundamental goal of Tesla and the reason we’re doing this, which is my primary motivation here, is to have the day of sustainable energy come sooner. That’s our goal. We’re neither here nor there on cryptocurrency,” he concluded.
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Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW.
Jeremy Owens is MarketWatch’s technology editor and San Francisco bureau chief. You can follow him on Twitter @jowens510.
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