Tesla pockets roughly $101 million in profit from sale of some of its bitcoins

Tesla pockets roughly $101 million in profit from sale of some of its bitcoins

Tesla Motors, an electric vehicle manufacturer and clean energy provider based in Palo Alto, California, has confirmed that it made more than $100 million by selling a fraction of its $1.5 billion worth of Bitcoin that it purchased earlier this year.

Bitcoin is a digital or crypto-currency that has been in existence for more than a decade. Invented by an unknown individual or a group of individuals using the name Satoshi Nakamoto, this digital currency remains controversial even more than a decade after its birth. It was first used in 2009, when it was rolled out as open-source software.

Even as the digital currency remains under ban in many countries, Tesla changed its investment policy and made an investment of nearly $1.5 billion in this controversial digital currency earlier this year. At the time, Tesla CEO Elon Musk announced that the updated investment policy provided the tech giant with more flexibility to diversify its portfolio and make the most of its returns.

Around a month after purchasing $1.5 billion worth of the digital currency in February this year, the automaker also started accepting the digital currency as payment option for its electric cars.

Now, the company has announced that it has actually trimmed its position in Bitcoin by 10 per cent by selling $272 million worth of the digital currency, pocketing roughly $101 million in profit from the sale.

Releasing its Q1 2021 financial results, Tesla said, “Year over year, positive impacts from volume growth, regulatory credit revenue growth, gross margin improvement driven by further product cost reductions and sale of Bitcoin ($101 million positive impact net of related impairment) were mainly offset by a lower ASP, increased SBC, additional supply chain costs, R&D investments and other items.”

Zack Kirkhorn, Chief Financial Officer (CFO) for Tesla Motors, also confirmed the sale of a fraction of the company’s digital currency took place in late March this year. Now, Tesla holds $1.331 billion worth of “digital assets,” which are reportedly only bitcoins, and Mr. Kirkhorn declared that the company has plans to hold the digital currency for a long term.

Trading prices of Bitcoin went on a wild ride after Tesla pumped the aforementioned huge amount of money in it. The EV giant’s announcement of its investment in the digital currency led to a jump of more than $10,000 in the digital currency’s trading prices within a short period.