Tesla (NASDAQ:TSLA) surprised shareholders with record revenues in its fourth quarter on the back of stronger vehicle production and deliveries, despite Elon Musk being torn between running his electric vehicle behemoth and posting on his shiny new social media plaything Twitter.
Tesla’s strong fourth quarter marked a firm increase on the prior quarter and the eighth consecutive quarter of earnings growth for the company.
The better-than-predicted results may have inadvertently supported bitcoin (BTC)’s impressive rally in the opening stages of 2023, since Musk felt no inclination to capitulate on Tesla’s holdings of the world’s largest cryptocurrency in order to shore up the balance sheet in the last quarter.
Granted, Tesla’s US$184mln reserve is only a splash in the ocean, but in an asset class subsumed by speculation, Musk’s activities in the cryptocurrency sector have the power to sway markets- just look back on the inexorable rise of Dogecoin on the back of a mere Tweet in 2019 as proof.
Tesla took a hefty US$34mln impairment charge on its bitcoin reserves due to the coin falling 15% against the US dollar over the quarter, mainly due to the FTX implosion.
Tesla’s BTC holdings are still considerably reduced since a year ago, after the firm disposed of nearly US$1bn, or 75%, of its bitcoins in the second quarter to support its cash position amid mass lockdowns in China.
"This should not be taken as some verdict on Bitcoin," Musk said at the time, adding that he may be looking to increase Tesla’s exposure down the line.
Given bitcoin’s strong recovery in recent weeks, one wonders if Musk is putting his bitcoin where his mouth is and buying the dip while it lasts.