Tesla’s Balance Sheet Not Volatile Enough. Needs Bitcoin, Musk Reckons

A few days back, while commenting on an article that documented Elon Musks's increasingly outlandish social media posts about Dogecoin, I mentioned that, in my opinion, it would be foolhardy for corporates to put Bitcoin on their balance sheets. While I recognize that not everyone who trades for fun (or even professionally) went to business school, and while acknowledging that many popular online commentators are similarly bereft when it comes to the kind of post-graduate studies which, while t

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18 thoughts on “Tesla’s Balance Sheet Not Volatile Enough. Needs Bitcoin, Musk Reckons

  1. ““Digital assets are currently considered indefinite-lived intangible assets under applicable accounting rules, meaning that any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale…”

    The rule cited by TSLA suggests that if they drive up Bitcoin, they could not mark up the value on their balance sheet or operating results. The only way to “recognize” the gain would be to sell it.

    That’s an interesting conundrum for crypto bulls, aint it?

  2. I just think it’s a little hilarious that whatever market deities exist, they have clearly decided to single out H for personal torment by forcing him to write more and more Bitcoin articles. What cosmic sin must H have committed to deserve such a fate? 😉

    Of course, if Bitcoin is the joke with no punchline, and the Fed/Congress are busily turning USD into a Hollywood horror test tube baby nursed in a vat of debt, that we all call “cute” only because all the other central bank babies are uglier, perhaps this all makes sense somehow. Can you hedge horror with humor, or vice versa?

  3. 3sts is the ticker, fortunately I have a very small position and yet the position is somewhat smaller now than it was a week ago. Musk seems particularly adept at crushing shorts and boosting his NW. I would be deeply concerned as an institutional investor being long TSLA

    1. I’d love to know what the large institutional shareholders think about getting potentially some unwanted bitcoin exposure. I wouldn’t be happy about it, if I was a PM. It will be interesting to see if he publishes a price list in Bitcoin!

  4. I love the irony of this, making every one who holds SPY in their portfolios indirect holders of Tesla and therefore BTC, most investors are now exposed to a degree. I think the flood gates could open into a real mania, Musk and Tesla have been such a “success” story in the markets that others might seek to emulate his move. If you think retail FOMO was fun to witness in 2017 wait for institutional FOMO later in 2021. I’ll continue to take profits in crypto as the dollar value climbs, but news like this make it hard to dampen my bullish view of the space, long BTC is becoming the best way to express a bearish view on humanity and I am most certainly bearish on the human race…

  5. “It seems unlikely to me that regulators would take Tesla’s balance sheet into consideration when making such a decision.”

    I think this touches on one of the most fascinating aspects of Bitcoin. I completely agree, but it seems if the US is going to outlaw or heavily regulate it, they need to do so sooner rather than later. BTC is quickly becoming entwined with some large public companies, institutional investors, and members of congress. How long before it is “too big to squash” because harsh regulation would damage some high profile balance sheets and crash the stock price of some big companies or funds in a fragile market?

    1. Yep. You’re exactly right.

      And that will be the irony of Bitcoin. It could in fact get some immunity from overzealous regulators by virtue of adoption by the very same system it’s supposed to supplant.

      Maybe that was part of the “master plan,” but somehow I doubt it.

      Either way, as I mentioned in the Apple piece (linked below), once it gets embedded into these balance sheets, it will be harder to regulate.


    2. The Gold Reserve Act of 1934 made it illegal to own gold- history could repeat itself and there could be an orderly process established for turning in cryptos to the US government in exchange for USD- at a rate established by the government.

  6. I have noticed that starting from early January TSLA behaves similarly to BTC (or HBTC) and very differently from other big tech.
    Now it is official: first of all Tesla is not a car manufacturer and even not a technology company, but some sort of cryptocurrency fund.
    Invest accordingly.

  7. Considering Bitcoin mining consumes the equivalent electrical output of Switzerland, putting $1.5 Billion into bitcoin is not consistent with Tesla’s mission. Whatever happened to saving the planet?
    The printing press at the US Treasury consumes far less electricity. Gives a new meaning to going green.

  8. Historically, Tesla’s net profits came from selling tax credits. Prospectively, appears Tesla’s net profits might be attributable to Bitcoin. Last I looked, the actual car business did not make money.
    How desperate is he to hold up Tesla’s stock price?

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