Tesla's Bitcoin Investment Nets $589M in Q4 2024
Tesla has reported a significant net income of $589 million from its tesla stock investment in the fourth quarter of 2024. This substantial gain is largely due to the strong bitcoin price increase and Tesla's early adoption of fair value accounting. The company currently holds 11,509 BTC, worth around $1.21 billion.
Tesla initially bought $1.5 billion worth of bitcoin in February 2021. Since then, it has sold portions of its holdings, but it still maintains a substantial position. As of December 31, 2024, Tesla's bitcoin position was valued at $1.08 billion.
Tesla's earnings per share in the reported quarter fell short of expectations. However, the company's decision to adopt fair value accounting earlier than mandated has allowed it to accurately reflect the value of its bitcoin holdings in its financial statements. This method, set to become mandatory in 2025, contrasts with past practices where companies had to write off bitcoin at the worst possible time, hiding investment gains.
MicroStrategy, the largest corporate holder of bitcoin with over 859,000 BTC valued at more than $90 billion, is expected to report a GAAP-compliant gain in the tens of billions for Q1 2025. If Tesla had held onto all its initial bitcoin, it would be worth around $3.5 billion more today.
Tesla's early adoption of fair value accounting has allowed it to benefit from the significant bitcoin price increase. Despite selling portions of its holdings, Tesla's current bitcoin position is worth around $1.21 billion. As bitcoin's value continues to fluctuate, Tesla's ability to accurately reflect its investment in its financial statements will be crucial.
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