Tesla Stock – A $589 Million Net Gain in Q4 2024
Tesla Stock – In its fourth-quarter results released on January 29, 2024, Tesla reported a $600 million gain from its Bitcoin (BTC) holdings, thanks to new accounting rules that allow companies to record the market value of digital assets on their books. The electric vehicle giant valued its Bitcoin stash at just over $1 billion, up significantly from $184 million in previous quarters, marking a net gain of $589 million over the quarter.
Tesla currently holds 9,720 BTC, according to Bitcoin Treasuries. This surge in value comes under the new 2023 Financial Accounting Standards Board (FASB) rule, which allows corporate holders to include the market value of crypto assets in their balance sheets, as opposed to the previous accounting practice, where crypto holdings’ value could only be recorded at the price they were sold.
Impact of New Accounting Rules
Under the previous accounting rules, if the value of crypto holdings decreased during a financial period, it would reflect as a loss, even if the market price had since recovered. Now, with the FASB rule change, the market value can increase on the balance sheet even if the assets are not sold, giving companies like Tesla the ability to reflect a more accurate value of their crypto holdings.
Tesla’s Overall Financial Performance
Tesla’s Q4 2024 results also showed a GAAP income of $2.3 billion, boosted by the Bitcoin gain. However, the company’s total revenues of $25.71 billion were slightly below Wall Street’s expectations of $27.22 billion, reflecting a 2% year-on-year increase. Tesla’s earnings per share (EPS) came in at $0.73, missing the analysts’ estimate of $0.76.
Despite the revenue miss, Tesla’s stock saw a 4.44% rally after hours, closing at $406.36, a 103.79% increase over the last 12 months.
Tesla’s Bitcoin Strategy and Broader Trends
Tesla’s Bitcoin involvement began in February 2021 when the company purchased 42,902 BTC. The company sold 75% of its Bitcoin holdings in July 2022 for $936 million. Tesla is among a growing number of companies, including MicroStrategy and Semler Scientific, adopting Bitcoin as a treasury strategy. MicroStrategy, in particular, holds the largest amount of Bitcoin among public companies, with 471,000 BTC worth $48 billion.
As Tesla continues to adapt to new accounting regulations, its Bitcoin holdings remain a significant factor in the company’s financial positioning, while also highlighting the increasing mainstream adoption of crypto by corporate entities.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
Leave a comment