In a SEC filing on Monday, Telsa revealed that the electric car company bought $ 1.5 billion in bitcoin and hopes to accept the cryptocurrency for its products in the future.
Video transcription
MYLES UDLAND: But, of course, this morning’s big story – and it almost sounds like a crazy libation from the business media right now. But Tesla in its annual 10-K, announcing that it bought $ 1 billion and 1/2 billion in Bitcoins. The company also says it plans to start accepting cryptocurrency for payments for its vehicles in the near future.
And we’re going to start our discussion there this morning. We see that the price of Bitcoin has gone up about 11%, $ 43,000, record highs in Bitcoin. Now, on the weekend and at 6 am this morning, when we all met here to talk about the show, we said that maybe we should talk about Dogecoin. Elon had a great fun weekend, continuing to talk about Doge, who continues to rise, although it is not really a thing. But the news gods giving us Elon, Bitcoin, Tesla, all in one place.
Julie, I’m going to go over to you and start with your initial reaction to this story. And does that mean anything other than, well, of course, Elon would do that? Does this mean that other companies will want to have part of their Bitcoin balance sheets? Where are you going from here?
JULIE HYMAN: I’ll save my analysis of the offensive line for later, Myles. Good deep provocation there, very deep because I think it will never happen. [LAUGHS] So, let’s talk about Elon, in fact. You know, it’s a bit of a surprise here for me because, you know, sometimes Elon can be, you know, all barking and no bite, so to speak.
In other words, he likes to troll people, as we know, via Twitter. And then he talked about Dogecoin, and he talks about Bitcoin. It is another thing that he is making his company put $ 1 and 1/2 billion in Bitcoin. So for me, that takes it to another level and shows that it’s not just a troll. It is something deeper on his part. And he talked about it a lot, to be fair.
You looking, in this morning’s filing on this, there were a number of caveats, right, because Bitcoin is a very volatile vehicle for putting a company’s money. And one of the things they say in the filing is, we believe our Bitcoin assets are highly liquid. However, digital assets may be subject to volatile market prices, which may be unfavorable at the time when we want or need to liquidate them.
So this is a big caveat here for a company that has really found stability and found its balance in terms of its cash position. So, it is interesting, the moment of this movement at that point.
BRIAN SOZZI: Well, here’s what I wrote, folks as soon as I saw this news cross the wire. Is Tesla a car salesman or a beast of the hype? What is this company doing here?
Also, remember that Tesla ended the fourth quarter with the fourth quarter of $ 19 billion in cash, but still, did Elon Musk contact his top 10 shareholders to discuss this change? I would probably say no.
And if you’re a big Tesla shareholder, you’ve probably had a good year and are feeling great. But you want to see Tesla spend $ 1.5 billion, even considering that treasury bills are yielding almost nothing; the money is not yielding anything? Do you want them to spend that money they raised in the past that is so precious to this company? Go there and spend that money on a volatile asset like Bitcoin, right?
And last but not least, does it change how big corporate America thinks about Bitcoin and its payment structure? If I have a phone bill, will I pay in Bitcoin? I think those are some of the things you want to think about. But then again, if Bitcoin loses, if it goes to 0, it goes $ 1.5 billion to Tesla. And I don’t know if it’s a good place to be.
MYLES UDLAND: Well, look, I don’t think Bitcoin goes to zero, so I don’t think we need to worry about the billion and a half going away. But the beast or exaggerated company is a very interesting way of framing that, Sozzi, because I think we’re at this point – and we can get off on the whole tangent here, which we won’t do because we don’t have time for it – about the role that business plays in culture.
And at the heart of that discussion is the role that Elon Musk plays not as a business leader, but as a cultural figure. And how do you separate the two? And you need to separate the two, because I think there is a very real kind of sober American corporate conservatism in your comments, Sozzi, about whether a company should be doing this?
How do you, a major Tesla shareholder, feel about the company putting billions of dollars into a speculative asset, even though they believe it is liquid and so on? That’s – you know, it’s an MBA issue, but it certainly looks like Elon Musk’s leadership at Tesla and the role that Tesla plays as a talking point, as a meme itself, as an aspirational brand, as a right way of looking at the world with Elon at the center of it is much bigger than the very – very mundane kind of discussion of how a corporate treasury department should distribute its liquid assets among a collection of cash and treasury bills, right? And then it’s a very strange thing – it’s just a very strange thing when you come from, you know, Sozzi, in the way that a management team would probably expect.
BRIAN SOZZI: And I’m just going to throw this additional fish in the barrel here – barrel here. How is this not some form of market manipulation? Elon Musk knows his weight in the cryptocurrency market.
He knows that if Tesla publishes a press release saying that we are going to invest $ 1.5 billion in Bitcoin, I mean, obviously, Bitcoin will go up, Julie. So he knows what he’s doing here.
JULIE HYMAN: Yes. E. It’s interesting, especially in the context of the entire GameStop and Reddit conversation. I would say two things in response to what Sozzi is saying. First of all, if you are a big shareholder in Tesla, you must already have a very strong stomach, right, because Elon Musk is not a predictable leader by any traditional metric of what a CEO normally looks like.
And it’s also interesting to me that here we are on Monday morning talking about Tesla, again, in the context of the GameStop-Reddit conversation. He seems to fit in with those things, doesn’t he? There was all this hype about GameStop and all this history.
And then, suddenly, here comes Elon Musk inserting himself into that story and that discussion as a supporter, he says, of the small investor, although we know that there were big investors on both sides of this negotiation. So it’s interesting here, again. He found his way back to the zeitgeist’s forefront on Monday morning.
MYLES UDLAND: Yes. And I think – I don’t think that is going to change. I think it kind of – kind of is. And I think that maybe we should more quickly accept the role that Elon plays in all of this because, again, it was not so long ago that it seemed like a little serious adventure.
And he is tweeting that they will be acquired and so on. But you know, the culture changes. And I think it’s so interesting to see the CEO of a publicly traded company as a cultural figure, as an iconoclast, but not just someone who speaks, someone who really acts on many of these things. And it is – I would not say it is jobsian. But, as Steve Jobs is certainly the only other CEO that we can remember that has something similar to the cultural weight that Elon Musk certainly has at the moment.