in a folder 10-Q filed with the US SEC yesterday, Tesla took an impairment charge of $170 million on the book value of your bitcoin assets. The company also recorded $64 million in profit from some of its bitcoin sales. The deposit 10-Q is a more complete version of the quarterly earnings filing with the SEC.
You’re there sells 75% of your bitcoin holdings.
When it bought bitcoin last year, Tesla said it would review its bitcoin holdings on a quarterly basis to check for deficiencies. Any profit can only be recorded after the sale of the valuable digital asset.
As China faces a spike in Covid-19 cases, Tesla has sold for $936 million worth of bitcoins last week to bolster its cash flow following the closure of its Shanghai plant. The sale represents approximately 75% since $1.5 billion in reserves of cryptocurrencies that the company accumulated as of the first quarter of 2021. The company did not disclose when it will sell its bitcoins.
The sale of bitcoins did not materially affect Tesla’s free cash flow. Investors feared the sale would have increased Tesla’s free cash flow, the difference between cash from operations and capital expenditures, to $621 million. But the $2.1 billion reduction in free cash flow in the first quarter was due to the Shanghai closures.
Bonus: Thailand’s SEC launches investigation into Zipmex exchange after withdrawal freeze.
Musk made a comment against the sale.
The CEO Elon Musk he said the selloff did not indicate broader avoidance of bitcoin. The company still maintains doecoin among his remaining $218 million in cryptocurrencies. He personally still has bitcoin, doecoin and ether, according to a tweet from March of this year.
As a reminder, Tesla briefly accepted bitcoin payments. However, it was stopped in May 2021 due to concerns of Musk about the environmental footprint of bitcoin.
Indeed, musk was subpoenaed by the SEC on June 13, 2022 for a 2018 tweet that said he arranged financing to take Tesla private. A settlement with the SEC in 2018 mandated that a committee examine the tweets of Musk before they are shipped.
To discover: Barclays would have invested millions of dollars in the copper custody company.