Tesla Has Already Made $1 Billion From Bitcoin Investment in Just a Month

Bitcoin might be a sideshow, but Wedbush Securities' Daniel Ives expects the investment to keep filling Tesla's trunk with cash.
Anthony RussoFeb 22,2021,15:40

Tesla’s investment in bitcoin earlier this month has already risen $1 billion and is expected to gain even further, Wedbush Securities says.

Originally, the world’s most valuable car company said it made its $1.5 billion bitcoin investment sometime in January, according to a filing with the U.S. Securities and Exchange Commission earlier this month.

The price of bitcoin has jumped from a midday high of $34,793.45 at the end of January to an intraday high of $57,487.03 on Feb. 20, data from CoinDesk shows. For the first time last week, bitcoin’s valuation surpassed $1 trillion.

Wedbush analyst Daniel Ives said in a note over the weekend that Tesla (Nasdaq: TSLA) is “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” as cited by CNBC.

In fact, Tesla has made more in bitcoin in just about a month than it has generated GAAP net income over the past year-plus. In the past five quarters, Tesla has posted $969 million in GAAP net income.

The analyst added that “While the Bitcoin investment is a side show for Tesla, it’s clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months.”

While Tesla has helped drive up the price of bitcoin, the same has not happened to its stock. In early trading today, the stock in Tesla slipped 3% lower from Friday’s close to $759 per share. On Sunday, Electrek reported Tesla had halted taking orders for the cheapest version of its midsize SUV, the Model Y that the company just launched last month.

Since Feb. 8, shares of Tesla are down 12% to date.

Ives rates Tesla as a hold with a $950 price target on the stock. That represents about 24% upside from its current trading levels.

Topics:Tesla, bitcoin.
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