Tesla’s decision to buy Bitcoin could lead to $ 460 million hit Q2 revenue – Barclays
(Kitco News) The decision to hold Bitcoin could hurt Tesla’s earnings in the second quarter, Barclays said.
In light of Bitcoin’s fall to $ 19,000 by the end of the second quarter, Tesla may end up reporting a fall in value of about $ 460 million, according to analyst Brian Johnson.
“With Bitcoin ending the quarter at ~ $ 19k (well below TSLA’s likely buy price range of ~ $ 32-33k), we expect TSLA to take a quarterly decline in value of ~ $ 460mn or ~ $ 0.40 per share,” CNBC Johnson was quoted as saying. said in a note to customers.
Tesla is scheduled to report its earnings this Wednesday after noon.
In early 2021, an SEC file revealed that Tesla bought $ 1.5 billion in Bitcoin. At the time, Bitcoin was worth around $ 30,000.
Since then, Bitcoin has seen massive ups and downs, rising to its record high of $ 69,000 in November 2021 and ending the second quarter of 2022 close to $ 19,000, which was around 70% lower than the record. At the time of writing, Bitcoin was trading at $ 21,549.
For Tesla, this means a loss of around $ 11,270 per coin, which is around $ 460 million in total based on the estimate that they bought 42,000 tokens.
Bitcoin suffered this year when investors left their risk positions, and contagion risk affected all cryptocurrencies. However, some analysts are a little more optimistic about the future of Bitcoin, as the world’s largest cryptocurrency broke $ 22,000 earlier on Monday.
“The result of [the inflation data] is another blow to economic and social well-being, as the Federal Reserve is forced to be more aggressive. However, Bitcoin has risen by over 10% since the news, and Ethereum has climbed by almost 40%. When the market begins to react positively to negative news, this is a signal that a local bottom may be in for now, as fear may have led to the news being priced in “, GlobalBlock analyst Marcus Sotiriou wrote in a note on Monday.
At the time of writing, the Tesla share has traded down almost 40% so far this year. Johnson added that he expects Tesla revenue to beat expectations on Wednesday.
“We expect a modest 2Q EPS battle vs. consensus, but see greater focus on FCF given CEO Elon Musk’s comments last month that Berlin and Austin are ‘giant money lenders right now,'” Johnson added.
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