An audited financial statement for Tesla shows that the award-winning car maker has been selling its digital assets. The report explores the company’s balance sheet at the end of the second quarter of 2022.
Following the sale, digital assets have reduced by 75% from the $2.48 billion peak in 2021. Conversely, Tesla has raised $936 million to its cash reserves, bridging the tightening revenue gap.
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The Selloff Motive Was to Raise Cash
According to an unaudited financial statement for the period ending June 2022, Tesla owned digital assets worth $1.26 billion. The Elon Musk-led company delved into the Crypto market in 2021, purchasing digital assets worth $1.5 billion. The value was reduced by a Crypto bear market and a further $272 million sale.
The report indicates that the iconic $936 million sale was made towards the end of June at the height of the Crypto winter. This is positive news for the Crypto market. It is an indicator of constant liquidity in the Crypto market, where investors can convert their digital assets to fiat currencies.
The Sale of Cryptos Increased the Earnings Per Share (EPS)
In an interview with CNBC, Elon Musk revealed that the company sold its digital assets to shore up its financial position. The sell-off was mainly driven by a cash crunch fear, especially after the re-emergence of covid lockdowns in China, one of its major markets.
The financial decision was based on an accurate projection since the firm’s revenues dropped to $16.93 on Q2 against a projection of $17.1 billion. The margins reduced from 32% to 27.9 % quarter-on-quarter amid the crippling inflation hurting consumers. The increased cash flows, however, led to a surge in the earnings per share to $2.27 against a projection of $1.81. The increasing EPS makes Tesla stocks attractive for investors looking to maximize their wealth.
Tesla Will Reinvest in The Crypto Market in Future
Elon Musk also revealed in the CNBC interview that the decision to sell Crypto should not be construed as waning confidence in Crypto. The billionaire entrepreneur is a renewed Crypto enthusiast and has been on record pumping Cryptos. On various occasions, Musk has alluded that Bitcoin is an ideal store of wealth and DOGE is the optimal digital asset for transacting.
Although the financial statement does not indicate a breakdown of the digital assets in Cryptos, Kevin Helms, CNBC’s Crypto analyst, believes that Tesla owns BTC, DOGE, and ETH.
The high EPS has led Tesla stock to surge by 1.5% in the latest trading. On the other hand, BTC hit a high of $24,250 from a low of $17,934 when Tesla sold off its digital assets.