Elon Musk’s company Tesla revealed on Monday that its Bitcoin investments cost it $170 million in the first six months of the year.
Tesla revealed last week that it has sold 75% of its Bitcoins, adding $936 million in cash to its balance sheet in the second quarter (Q2) of this year as it deals with an economic meltdown and the collapse of cryptocurrencies.
Tesla stated in a new filing with the US Securities and Exchange Commission (SEC) that it invested $1.50 billion in Bitcoin in the first quarter of 2021.
“In the six month period ended June 30, 2022, we recorded $170 million of impairment losses resulting from changes to the carrying value of our bitcoin and gains of $64 million on certain conversions of bitcoin into fiat currency by us,” the electric car-maker revealed.
“As with any investment and consistent with how we manage fiat-based cash and cash-equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on the needs of the business and our view of market and environmental conditions,” it added.
The automaker also stated that it received a new SEC subpoena related to Musk’s tweets about taking the company private in 2018.
The SEC had issued subpoenas to Tesla following Musk’s previous statement that he was considering taking Tesla private.
“On November 16, 2021, and June 13, 2022, the SEC issued subpoenas to us seeking information on our governance processes around compliance with the SEC settlement, as amended,” the company informed.
During the company’s Q2 earnings call with analysts, Musk explained why the company sold a large portion of its Bitcoin holdings “was that we were uncertain as to when the COVID lockdowns in China would alleviate”.
“So it was important for us to maximise our cash position, given the uncertainty of the COVID lockdowns in China. We are certainly open to increasing our Bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin,” he noted.
Given the shutdowns in China, Musk expressed concern about the company’s overall liquidity.
“And we have not sold any of our Dogecoin,” he added.
