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In an SEC filing on Monday, Telsa revealed that the electric car company had purchased $ 1.5 billion worth of bitcoin and expects to accept cryptocurrency for its products in the future.
Video transcript
MYLES ABROAD: But of course, this morning’s big story – and it almost sounds like a crazy business media bookstore at this point. But Tesla in its annual 10-K, announcing that it bought $ 1 billion and $ 1/2 billion worth of Bitcoin. The company also says it plans to start accepting cryptocurrency for payments for its vehicles in the near future.
And let’s start our discussion there this morning. We see that the price of Bitcoin is up around 11%, $ 43,000, from all-time highs on Bitcoin. Now over the weekend and at 6am this morning when we all got together here to talk about the show, we said maybe we should talk about Dogecoin. Elon had a good fun weekend, continuing to talk about Doge, who keeps going up, although that’s not really a thing. But the gods of the news are offering us Elon, Bitcoin, Tesla all in one place.
Julie, I’ll tell you and start with your initial reaction to this story. And does that mean anything beyond, well, sure Elon would do that? Does this mean that other companies will want to have part of their balance sheet in Bitcoin? Where does it go from here?
JULIE HYMAN: I’ll save my offensive line analysis for later, Myles. Good deep tease there, very deep because I don’t think it ever happens. [LAUGHS] So let’s talk about Elon, indeed. You know, it’s kind of a surprise here to me because, you know, sometimes Elon can be, you know, all bark and no bite, so to speak.
In other words, he likes to troll people, as we know, through Twitter. And so he talked about Dogecoin, and he’s talking about Bitcoin. This is another thing where he asks his company to put $ 1 billion and $ 1/2 billion in Bitcoin. So for me that takes things to another level and shows that he’s not just a troll. It’s something deeper on his part. And he’s talked about it a lot, to be fair.
You look, in this morning’s filing on this, there were a lot of caveats, right, because Bitcoin is such a volatile vehicle for putting money into a business. And so one of the things they say in the deposit is, we think our bitcoin holdings are very liquid. However, digital assets can be subject to volatile market prices, which can be unfavorable when we want or need to liquidate them.
So that’s a pretty big warning for a company that has just really found stability and found its place in terms of cash flow. It is therefore interesting, the moment chosen for this move on this point.
BRIAN SOZZI: Well, here’s what I wrote, all of you as soon as I saw this news cross the wires. Is Tesla a car salesman or a hype beast? What is this company doing here?
Also, keep in mind that Tesla ended the fourth quarter with $ 19 billion in cash, but even still, has Elon Musk reached out to his top 10 shareholders to discuss this move? I would say probably not.
And if you’re a big Tesla shareholder, you’ve probably had a good year and are feeling pretty good. But do you want to see Tesla spend $ 1.5 billion, even though treasury bills don’t make anything; money does not earn anything? Do you want to see them spend this money that they have amassed in the past that is so precious to this business? Go ahead and spend that money on a volatile asset like Bitcoin, come on?
And finally, does it change the way big American companies think about Bitcoin and their payment structure? Am I – if I have a phone bill, will I pay in Bitcoin? I think these are some of the things you want to think about. But again, if Bitcoin loses, if it goes to 0, there will be $ 1.5 billion down the toilet for Tesla. And I don’t know if it’s a good place to be.
MYLES ABROAD: Well listen, I don’t think Bitcoin is going to go down to zero so I don’t think we need to worry about the billion and a half going missing. But the beast or the hype company is a very interesting way to frame it, Sozzi, because I think we’re at this point – and we can sort of go a whole tangent here, which we won’t because that we don’t have time for that – on the role that business plays in culture.
And central to that discussion is the role Elon Musk plays not as a business leader, but as a cultural figure. And how do you separate the two? And do you need to separate the two, because I think there’s a very real type of American corporate conservatism in your comments, Sozzi, about a company doing this?
What do you think, as a large shareholder of Tesla, that the company is investing billions of dollars in speculative asset when they believe it is liquid etc. It’s a – you know, it’s an MBA-type question, but it certainly sounds like Elon Musk’s leadership on Tesla and the role Tesla plays as a talking point, as a meme himself, as an ambitious brand, like a certain way of looking at the world with Elon at the center of it is something much bigger than the very – very mundane kind of talk about how a corporate treasury department should distribute its money. liquid assets among a collection of cash and treasures, right? And so it’s kind of very weird – it’s just a very weird thing when you come to, you know, Sozzi, the way a leadership team would probably expect to do it.
BRIAN SOZZI: And I’m just going to throw that extra fish in the barrel here – barrel here. How is this not a form of market manipulation? Elon Musk knows how much weight he holds in the cryptocurrency market.
He knows that if Tesla issues a press release saying we’re going to invest $ 1.5 billion in Bitcoin, I mean obviously Bitcoin is going to go up, Julie. So he knows what he’s doing here.
JULIE HYMAN: Yes. And. It’s interesting, especially in the context of all the GameStop and Reddit conversation. I would say two things in response to what Sozzi is talking about. First of all, if you are a large Tesla shareholder, you must already have a pretty strong stomach, right, because Elon Musk is not a predictable leader by any traditional metrics of what generally looks like. a CEO.
And it’s also interesting to me that we were talking about Tesla here Monday morning, again, in the context of the GameStop-Reddit conversation. It seems to fit into these things, doesn’t it? There was all this hype about GameStop and this whole thing.
And then all of a sudden here is Elon Musk fitting into this story and this discussion as a supporter, he says, of the small investor, even though we know there were big investors on both sides of it. trade. So it’s interesting here, again. He found his way back to the zeitgeist’s vanguard this Monday morning.
MYLES ABROAD: Yeah. And I think – I don’t think that’s going to change. I think it’s sort of – it’s sort of. And I guess maybe it’s up to us to come to terms with Elon’s part in all of this more quickly because, again, it wasn’t that long ago that it looked like this low-key endeavor.
And he tweets that they are going to be acquired and so on. But you know, the culture is changing. And I think it’s so interesting to see the CEO of a listed company as a cultural figure, as an iconoclast, but not just as someone who talks, someone who actually acts on a lot of things. And it’s – I wouldn’t say it’s jobian. But like, certainly, Steve Jobs is the only other CEO we can recall who has anything like the cultural weight that Elon Musk certainly has at this point.
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