Tesla Gained $64 mln on Bitcoin Sales but Lost $170 as Impairment

According to a new 10-Q filing with the US SEC, Tesla gained $64 million on the sale of 75 percent of its BTC holdings, as well as an impairment of $170 million on its remaining holdings.

By simple calculations, it can be established that overall Tesla lost $106 million on its BTC assets. Tesla CFO Zach Kirkhorn said:

We converted a majority of our bitcoin holdings to fiat for a realized gain, offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the [Profit and Loss Statement] included within restructuring and other.

The company did not reveal the selling price for its BTC, but a rough calculation shows the average price would be of around $29,000 per bitcoin, helping Tesla avoid a much more substantial impairment charge. Bitcoin ended Q2 at a price of about $18,700.

It is only recently that Tesla acquired its BTC and now is already selling them. In Q1 2022 Tesla bought $1.5 billion worth of bitcoin but did not disclose its average purchase price. Later in Q1, the company trimmed its bitcoin position by 10%, a sale that boosted that quarter’s earnings by $272 million.

Tesla hadn't added to or reduced its holdings until the most recent quarter, a move CEO Elon Musk said was taken to raise cash in the face of COVID-19 lockdowns in China, one of its largest markets.