Tesla's Net Income Boosted by Bitcoin Profits

Tesla, the leading e-car manufacturer, has reported a $600 million profit stemming from its Bitcoin holdings in the fourth quarter of the year.

This was possible due to the adoption of a new accounting guideline introduced by the Financial Accounting Standards Board (FASB) that makes it possible to report holdings at their current market value. 

The leading e-car manufacturer initially purchased Bitcoin back in 2021. However, it has sold a significant portion (roughly 75%) of its holdings since then.

Related

Thu, 10/24/2024 - 05:19

Tesla Confirms It Still Holds Bitcoin

Alex Dovbnya

The company's total Bitcoin holdings now stand at nearly $1.1 billion after the company adopted the new accounting standard. It did not sell any coins in the fourth quarter.

Tesla's Bitcoin holdings would have been worth roughly $2.4 billion as of now had it refrained from liquidating a large chunk of them in the past. 

Propping up Tesla's earnings 

Shares of Tesla (TSLA) are up more than 4% in premarket trading after dipping by more than 2% on Wednesday. 

The Bitcoin profits helped to brighten up the overall picture for Telsa, which would have failed short of meeting the consensus earnings per share (EPS) estimate.

"Strip out the $0.15 per share gain from Tesla's Bitcoin sale, and Q4 EPS was $0.58, which is a 25% miss vs consensus estimates of $0.77," Tesla bear Motorhead (@BradMunchen).

Investors were apparently encouraged by robotaxi promises as well as expectations of a sales recovery in 2025. The company also said that plans for more affordable models remain on track for production in the first half of the current year. Tesla's "Cybercab" Robotaxi product is expected to enter into volume production next year.