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Tesla Could Take $460M Impairment Charge on BTC Holdings
Summary: According to a recent note by Brian Johnson, senior equity analyst at Barclays, Tesla, Inc. may take a $460M impairment charge (a drastic reduction or loss) on its Bitcoin holdings. Tesla is scheduled for a report on Wednesday after the stock market closes. Brian Johnson follows the U.S. Autos and Auto Parts sector at Barclays ...
According to a recent note by Brian Johnson, senior equity analyst at Barclays, Tesla, Inc. may take a $460M impairment charge (a drastic reduction or loss) on its Bitcoin holdings. Tesla is scheduled for a report on Wednesday after the stock market closes. Brian Johnson follows the U.S. Autos and Auto Parts sector at Barclays and is leading the Global Autos, research team.
Tesla's first BTC investment was in the amount of $1.5 billion and took place back in January 2021, when one Bitcoin was selling for $32k. The company only sold 10% of its Bitcoin holdings in the first quarter of 2021, and Johnson assumes that Tesla has not bought or sold any BTC. With Bitcoin ending the second quarter at $18.7k, Johnson expects Tesla to take an impairment charge of $460M, or roughly 40 cents per share.
Digital assets accounting rules say that if the price of an asset falls during a quarter, the company must take an impairment charge. However, if the price of a digital asset increases, it isn't considered a gain until it has been sold. Tesla's stock is currently trading at $744.55 per share at the time of writing, down 30% for 2022.
Author: Garrett Meifert
Tags: Bitcoin (BTC),Elon Musk,Tesla
Link: Tesla Could Take $460M Impairment Charge on BTC Holdings [Copy]
