In an SEC filing on Monday, Telsa revealed that the electric car company purchased $1.5 billion worth of bitcoin and expects to accept the cryptocurrency for its products in the future.
MYLES UDLAND: But of course, the big story this morning– and it almost sounds like a mad lib of business media at this point. But Tesla in its annual 10-K, announcing that it has purchased $1 and 1/2 billion worth of Bitcoin. The company also says that it plans to begin accepting the cryptocurrency for payments for its vehicles in the near future.
And let’s begin our discussion there this morning. We see the price of Bitcoin is up about 11%, $43,000, record highs on Bitcoin. Now, over the weekend and at 6 o’clock this morning when we all met here to talk about the show, we said maybe we should talk about Dogecoin. Elon had a nice fun weekend, continuing to talk about Doge, which continues to go up, even though it’s not really a thing. But the news gods gifting us Elon, Bitcoin, Tesla all in one place.
Julie, I’ll throw it over to you and just kind of start with your initial reaction on this story. And does it mean anything beyond, well, of course, Elon would do that? Does it mean other companies are going to want to have part of their balance sheet in Bitcoin? Where does it kind of go from here?
JULIE HYMAN: I’ll save my offensive line analysis for later, Myles. Good deep tease there, very deep ’cause I don’t think it’s ever happening. [LAUGHS] So let’s talk about Elon, indeed. You know, it is a bit 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, via Twitter. And so he’s talked about Dogecoin, and he talks about Bitcoin. It’s another thing where he’s actually having his company put $1 and 1/2 billion in Bitcoin. So to me, that does take it to another level and shows that it’s not just a troll. It is something deeper on his part. And he has talked a lot about it, to be fair.
You looking, at the filing this morning about this, there were a lot of caveats, right, because Bitcoin is such a volatile vehicle to put a company’s cash in. And so one of the things that they say in the filing is, we believe our Bitcoin holdings are highly 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.
So that’s pretty big caveat here for a company that has just really found stability and found its footing in terms of its cash position. So it’s interesting, the timing of this move on that point.
BRIAN SOZZI: Well, here’s what I wrote down, y’all as soon as I saw this news cross the wires. Is Tesla a car seller or a hype beast? What is this company doing here?
Also, keep in mind Tesla ended the fourth quarter with quarter $19 billion in cash, but even still, did Elon Musk contact his top 10 shareholders to discuss this move? I would say probably not.
And if you are a large shareholder in Tesla, you probably had a good year, and you’re feeling pretty good. But do you want to see Tesla spend $1.5 billion, even considering treasuries are yielding next nothing; cash is yielding nothing? Do you want to see them spend this money that they have raised in the past that is so precious to this company? Go out there and spend this money on a volatile asset like Bitcoin, come on?
And then last but not least, does this change how big corporate America thinks about Bitcoin and their payment structure? Am I– if I have a phone bill, am I going to be paying in Bitcoin? I think that’s some of the things you want to be thinking about. But again, if Bitcoin loses, if it goes to 0, there goes $1.5 billion down the toilet for Tesla. And I don’t know if that’s a good place to be.
MYLES UDLAND: Well, look, I don’t think Bitcoin is going to be going to zero, so I don’t think we need to worry about the billion and a half going away. But the hype beast or company is a very interesting way to frame it, Sozzi, because I do think we’re at this point– and we can sort of go off on a whole tangent here, which we won’t do ’cause we don’t have time for it– about the role that business plays within the culture.
And at the center 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 do you need to separate the two, because I do think there’s a very real kind of staid corporate America conservatism in your comments, Sozzi, about should a company be doing this?
How do you as a large shareholder of Tesla feel about the company putting billions of dollars into a speculative asset though they do believe it is liquid so on and so forth? That’s a– you know, that’s an MBA-type 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 aspirational brand, as a certain way to look at the world with Elon at the center of that is something a lot bigger than the kind of very– very mundane discussion of how should a corporate treasury department be distributing its liquid assets among a collection of cash and treasuries, right? And so it is sort of a very strange– it’s just a very strange thing when you come at it from, you know, Sozzi, the way a management team probably would expect themselves to.
BRIAN SOZZI: And I’ll just toss this additional fish into the barrel here– barrel here. How isn’t this is some form of market manipulation? Elon Musk knows the weight he holds in the cryptocurrency market.
He knows that if Tesla comes out with a press release saying we’re going to invest $1.5 billion in Bitcoin, I mean, obviously Bitcoin is going to rise, Julie. So he knows what he’s doing here.
JULIE HYMAN: Yea. And. It’s interesting, especially in the context of the whole GameStop and Reddit conversation. I would say two things in response to what Sozzi’s talking about. First of all, if you’re a large shareholder of Tesla, you already have to have a pretty strong stomach, right, because Elon Musk is not a predictable leader by any traditional metric of what a CEO typically looks like.
And it’s also interesting to me that here we are Monday morning talking about Tesla, again, in the context of the GameStop-Reddit conversation. He seems to insert himself in these things, doesn’t he? There was all this hype about GameStop and about that whole story.
And then all of a sudden, here comes Elon Musk inserting himself in that story and in that discussion as a supporter, so he says, of the small investor, although we know there were big investors on both sides of that trade. So it’s interesting here, again. He has found his way back to the forefront of the zeitgeist on this Monday morning.
MYLES UDLAND: Yeah. And I think– I don’t think that’s going to change. I think that just sort of– it just sort of is. And I guess it is maybe on us to more quickly accept the role that Elon plays in all this because, again, it wasn’t so long ago that it seemed like this unserious venture.
And he’s tweeting out they’re going to get acquired and so on and so forth. But you know, culture changes. And I think it’s just so interesting to see the CEO of a publicly traded company as a culture figure, as an iconoclast, but not just someone who talks, someone who actually takes action on a lot of this stuff. And it’s– I wouldn’t say it’s jobsian. But like, certainly, Steve Jobs is the only other CEO that we can call to mind who has anything like the cultural weight that Elon Musk certainly has at this point in time.