Tesla’s Share Price Down 30% after $1.5Bn Bitcoin Purchase
After Tesla Inc. announced the company held $1.5 billion in Bitcoin on its balance sheet during the first week of February, the company’s stocks price has dropped over 30%.
However, analysts said Tesla’s shareholders would be “very supportive” if the company announced it would sell the Bitcoin.
In a related development, the share price of Microstrategy’s firm has also dropped considerably during the last 30 days, after multiple Bitcoin treasury purchase announcements.
Following Tesla announcement to the world about the purchase of $1.5 billion worth of Bitcoin (BTC) on its balance sheet, the price of BTC shot up considerably that day.
However, 30 days after the fact, it seems shareholders of Tesla (NASDAQ: TSLA) are not so hip to the idea.
On social media and forums, critics and even lawyers, have called out companies like Tesla for making such decisions.
Tesla shares have not fared so well since the purchase, even though the firm did profit nicely from BTC value increase.
The day the Tesla-Bitcoin announcement went viral, shares of TSLA were swapping for $863 a unit.
Today, TSLA is down -30.82% and exchanging hands for $597 per share the day before Monday’s stock market opening.
The former CEO of Aegon Asset Management, Gary Black, discussed Tesla’s Bitcoin holdings on Twitter three days ago and said shareholders would likely be pleased if Elon Musk’s company sold the BTC.
“Imagine the positive momentum [Tesla] would create,” Black tweeted. “If they announced the sale of their [Bitcoin] position, and authorized a [Tesla] stock buyback instead. Highly unlikely, but shareholders would be very supportive,” he added.
However, a number of people disagreed with Black’s statements and one individual said he didn’t want them buying back stock.
“I want them investing in growth, and making another billion on their BTC position,” the person replied to Black. The former CEO of Aegon Asset Management disagreed and said that it “makes absolutely no sense.”
“If you asked 100 institutional [Tesla] shareholders would they prefer [Tesla] to invest $1.5B excess cash in BTC, or $1.5B excess cash in [Tesla] stock, 95/100 would choose [Tesla] stock,” Black insisted.
Meanwhile, the firm Microstrategy has also been purchasing Bitcoin on a regular basis for a few months now and has profited from this decision as well.
On March 5, 2021, Microstrategy announced it had acquired another $10 million worth of BTC and it currently holds 91,064 Bitcoin on the firm’s balance sheet.
But over the last 30 days, Microstrategy shares (NASDAQ: MSTR) haven’t done well at all and have dropped -51.25% since February 9, 2021.
On that day in February, MSTR was swapping for $1,272 and today’s stats show the shares were swapping for $620 per unit before the market closed on Friday.
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Tesla’s Share Price Down 30% after $1.5Bn Bitcoin Purchase
