Telsa revealed in an SEC filing on Monday that the electric car company has bought bitcoin worth $ 1.5 billion and expects to adopt the cryptocurrency for its products in the future.
Video transcription
MYLES ABROAD: But of course, the big story this morning – and it sounds almost like crazy business media at this point. But Tesla announced in its annual 10-K that it had bought $ 1 and a half billion in Bitcoin. The company also says it plans to adopt the vehicle payment cryptocurrency soon.
And let’s start our discussion there this morning. We see that the price of Bitcoin is about 11%, $ 43,000, higher than Bitcoin. Now, over the weekend and at 6am this morning when we all met here to talk about the program, we said maybe we should talk about Dogecoin. Elon had a fun weekend and continued to talk about Doge, which keeps rising, even though it’s not really something. But the news gods give us Elon, Bitcoin, Tesla all in one place.
July, I’ll throw it to you and just start with your initial reaction to this story. And does that mean anything further, well, of course, would Elon do that? Does this mean that other companies want a share of their balance in Bitcoin? Where does it kind of come from?
JULIE HYMAN: I’ll save my offensive line analysis for later, Myles. Good deep teasing there, very deep, because I do not think it ever happens. [LAUGHS] Let’s indeed talk about Elon. You know, it’s a little bit of a surprise to me, because you know, sometimes Elon can be, you know, everyone barking and no biting, so to speak.
In other words, he likes to troll people, as we know, via Twitter. And that’s why he’s talking about Dogecoin, and he’s talking about Bitcoin. This is another thing where he is actually investing $ 1 and 1/2 billion in Bitcoin. So, it takes it to another level and shows that it is not just a troll. It’s something deeper on his part. And he talked a lot about it, to be honest.
If you filed this morning, there were a lot of caveats, no, because Bitcoin is such a volatile vehicle for depositing a company’s cash. And one of the things they say in the submission is that we believe our Bitcoin holdings are very liquid. However, digital assets may be subject to volatile market prices, which may be unfavorable at the time we want or need to liquidate them.
It is therefore a great reservation here for a company that has only found stability and found its position in terms of its cash position. It is therefore interesting, the timing of this step at that point.
BRIAN SOZZI: Well, that’s what I wrote down, all as soon as I see the news coming through the threads. Is Tesla a car salesman or a hype animal? What is this company doing here?
Also keep in mind that Tesla ended the fourth quarter with $ 19 billion in cash, but still: did Elon Musk contact his top 10 shareholders to discuss this move? I would probably say no.
And if you’re a big shareholder in Tesla, you’ve probably had a good year and you feel pretty good. But would you like to see Tesla spend $ 1.5 billion, even if the treasury yields nothing more; does not yield cash? Do you want to see them spend the money they have raised in the past that is so precious to this company? Go there and spend this money on a volatile asset like Bitcoin, come on?
And then, but not least, does it change how big corporate America thinks about Bitcoin and their payment structure? Am I – if I have a phone bill, am I going to pay in Bitcoin? I think these are some of the things you want to think about. But again, if Bitcoin loses, and if it goes 0, $ 1.5 billion goes down the toilet for Tesla. And I do not know if this is a good place to be.
MYLES ABROAD: Well, look, I do not think Bitcoin is going to be zero, so I do not think we need to worry about the one and a half billion. But the hype beast or company is a very interesting way to frame it, Sozzi, because I think we’re at this point – and we can touch a little here, which we will not do, because we do not have time for that – about the role that matters play within the culture.
And the focus of the discussion is the role that Elon Musk does not play as a business leader, but as a cultural figure. And how do you separate the two? And should you separate the two, because I think there’s a very real kind of conservative American conservatism in your comment, Sozzi, about would a company do that?
How do you, as a major Tesla shareholder, feel about the company putting billions of dollars into a speculative asset, even though they believe it’s liquid, and so on? It’s a – you know, it’s an MBA question, but it certainly feels like Elon Musk’s leadership of Tesla and the role that Tesla plays as a talking point, as a meme itself, as an ambitious brand, as a certain way of looking at the world with Elon in the middle, it’s something much bigger than the kind, very mundane discussion of how a department of treasury should distribute its liquid assets among a collection of cash and treasuries, or how ? And so it’s a very strange thing – it’s just a very strange thing when you get out of it, you know Sozzi, as a management team would probably expect from themselves.
BRIAN SOZZI: And I’ll just throw this additional fish in the barrel here – take it here. How is this not some form of market manipulation? Elon Musk knows the weight he has in the cryptocurrency market.
He knows that if Tesla comes out with a press release that we are going to invest $ 1.5 billion in Bitcoin, I mean, of course, Bitcoin is going to rise, July. So he knows what he’s doing here.
JULIE HYMAN: Yes. And. This is interesting, especially in the context of the whole GameStop and Reddit conversation. I would say two things in response to what Sozzi said. First of all, if you’re a big shareholder of Tesla, you should, albeit, have a pretty strong stomach, because Elon Musk is not a predictable leader by any traditional measure of what a CEO usually looks like. not.
And it’s also interesting to me that we’re talking about Tesla again on Monday morning in the context of the GameStop Reddit conversation. It looks like he’s sticking to these things, doesn ‘t he? There was all this hype about GameStop and about the whole story.
And then all of a sudden, Elon Musk finds himself in that story and in the discussion as a supporter, so he says, of the small investor, even though we know there were big investors on both sides of the trade. So this is interesting again. He found his way to the forefront of the spirit of the times on Monday morning.
MYLES ABROAD: Yes. And I think– I do not think it’s going to change. I think it’s just like that. And I think it’s perhaps up to us to accept more quickly the role that Elon plays in all of this, because it was not so long ago again that it seemed like this irregular undertaking.
And he tweets that they are going to be acquired, and so on. But you know, culture changes. And I think it’s just as interesting to see the CEO of a listed company as a cultural figure, as an iconoclast, but not just someone who talks, someone who actually does a lot of these things. And it is – I would not say it is work. But as Steve Jobs can certainly be the only other CEO we can keep in mind that has something like the cultural weight that Elon Musk definitely has at this point.