9 ms·

If TSLA has already dumped their Bitcoin, Elon just pulled off a highly lucrative pump and dump scheme. 1. Buy $1.5 billion in BTC 2. Announce TSLA will accep

by Arcuru 5y ago

If TSLA has already dumped their Bitcoin, Elon just pulled off a highly lucrative pump and dump scheme. 1. Buy $1.5 billion in BTC 2. Announce TSLA will accept BTC, with the knowledge that very few people will actually do that, and public support from a major company will drive up the price of BTC. 3. Sell off your BTC at the higher price. A portion was sold in Q1 for a hefty profit already. 4. Rinse and repeat with DOGE? The environmental impact was well known before they bought it, so it's a little odd that they'd reverse course because of that.

londons_explore 5y ago
> The environmental impact was well known before they bought it, so it's a little odd that they'd reverse course because of that. I wonder if the original decision to accept bitcoin was a quick decision by the CEO, but now the rest of the company and the shareholders have persuaded them it isn't a public relations risk they should be taking. Imagine the headline - "Every Tesla EV bought with bitcoin gives off more CO2 than a gas car!"
- qayxc 5y ago
  Or - and this might sound a little tin foil-hat - this was a strategic move to send the price of Bitcoin down, so they can buy the 10% they sold in Q1 back at lower price. Crypto is an unregulated market with ridiculously high volatility and announcements or big buy-ins are a relatively safe method of controlling the price (to a degree). It's a win-win in the eyes of the management - great PR ("see - they DO care") and dropping crypto prices...
  - drited 5y ago
    While a popular opinion, that does sound more tin foil hat to me than the alternative that he updated his knowledge in the last few months and/or had his opinion on Bitcoin changed by communication from others in the organisation. Tesla is a 568 billion market cap company. The profit it made on Bitcoin doesn't move the needle enough to justify some elaborate scheme to pump and dump. Musk is no stranger to whimsical decisions that, while involving a large amount of money in absolute terms, are not material in the context of the much larger value of his shares in Tesla.
    - qayxc 5y ago
      > [...] he updated his knowledge in the last few months and/or had his opinion on Bitcoin changed by communication from others in the organisation. The former idea is ridiculous - so the "Techno King of Tesla" (his choice of title, not mine) took months to learn that proof-of-work crypto produces a lot of CO²? Please... As for the latter, I doubt that to be the case with a person who allegedly acts like this: "If you said something wrong or made one mistake or rubbed him the wrong way, he would decide you’re an idiot and there was nothing that could change his mind." [0] > Tesla is a 568 billion market cap company. The profit it made on Bitcoin doesn't move the needle enough to justify some elaborate scheme to pump and dump. Excuse me? Tesla's Q1 net income was $438M, $101M of which the company attributed to selling crypto [1], that's a whopping 23% of their net profits. I'd say that's "moving the needle" quite a bit indeed. YMMV of course, but I'd like to think that close to a quarter of net income is quite substantial. [0] https://www.thesun.co.uk/news/7977370/elon-musk-fired-hundreds-tesla-employees-behaviour-erratic/ https://www.thesun.co.uk/news/7977370/elon-musk-fired-hundre... [1] https://www.cnbc.com/2021/04/26/tesla-tsla-earnings-q1-2021-.html https://www.cnbc.com/2021/04/26/tesla-tsla-earnings-q1-2021-...
      - croes 5y ago
        And the rest of the profit was from selling carbon credits. And now they are losing a big part of one large buyer. https://fortune.com/2021/05/05/tesla-selling-co2-credits-stellantis-loss-of-business/ https://fortune.com/2021/05/05/tesla-selling-co2-credits-ste...
      - drited 5y ago
        >>'took him months to learn' You say that like he didn't have two giant companies to run. He wasn't studying bitcoin all this time. >>Q1 profits Company valuation depends on decades of earnings. Current earnings matter little to the valuation of high growth companies. >>excuse me You're excused. It's clear that assessing public company valuations is not your area.
        qayxc 5y ago
        > You're excused. It's clear that assessing public company valuations is not your area. Basic business economics doesn't seem to be your area. Here's a basic example of how you can shoot the "public valuation" of a company into Low Earth Orbit without actually earning a single penny for your operations: Issue 100 million shares at 0.01 cents per share and go public. That's now a $10k dollar public company. Next, you do an increase in capital stock by selling 1 million additional shares at 0.5 dollars per share to gullible investors. In order to achieve that, you hire a bunch of credible consultants who support your fundraiser by lending your company their good reputation and who advertise your business. You can pay them from the $500k you got from selling the new 1M shares and you can now call yourself a multi-millionaire, because the initial 100 million shares are now worth $50M on paper, because that's the latest share price. See how that works and why public valuation based on share value isn't always the most useful tool in assessing a company's finances? > Current earnings matter little to the valuation of high growth companies. See above for how a company can still be cash-starved from cost of operations and investments despite being worth billions on paper. Current earnings do matter, because the current share price doesn't pay wages or keeps the lights on in your Gigafactories. edit: I also find it quite amusing that you think the self-proclaimed "King of Doge" and co-founder of PayPal(!) doesn't know how crypto works, oh please.
mmahemoff 5y ago
From the linked statement: "Tesla will not be selling any Bitcoin" Edit: Yes, technically it’s future tense, but I’d be surprised if there were going to declare this without also disclosing any material amount they’ve already disposed of. It would do wonders for any charge of pump and dump.
- bourgwaletariat 5y ago
  Are you suggesting Elon Musk isn't honest? https://finance.yahoo.com/news/tesla-sold-bitcoin-q1-proceeds-202359810.html https://finance.yahoo.com/news/tesla-sold-bitcoin-q1-proceed...
  - trompetenaccoun 5y ago
    Remember when he tweeted that the TSLA price was too high just so he could buy back stock at a lower price? Then after getting fined a measly $20 million he said it was "worth it". And to be fair, at least he's honest and open about his market manipulation, unlike other players. Shows us that he's able to get away with it. If this doesn't wake people up about the blatant manipulation that goes on in financial markets, I don't know what will.
  - gpm 5y ago
    Future/past tense... that statement was future tense and simply be the rules of the english language excludes the sales you are referring to.
- mrtksn 5y ago
  What if he sold most of it already and simply won't sell anymore? The statements is about their intentions for the future, it's not about what they did or did not.
- m3kw9 5y ago
  Maybe he did a wallet transfer, then sold personally. Transfer the balance back to company. Semantics.
- cableshaft 5y ago
hooande 5y ago
As far as pump and dumps go, this would make a very tiny amount of money for a company of Tesla's market cap. In another post someone said they made $270MM from selling bitcoin in Q1. On a market cap of close to $590B. And they can only really do that trick a few times at most. I have no idea what the true motivation for Tesla accepting bitcoin was. But I would be surprised if a publicly traded company took this much risk for such a relatively small amount
- onlyrealcuzzo 5y ago
  $270MM was >60% all of Tesla's $480MM Q1 profit.
  - hooande 5y ago
    It's so unlikely that they can repeat this. Telsa is supposedly one of the most valuable companies in the world, as measured by market cap. There's no way they're depending on pump and dump schemes to sustain their profitability. If that were the case, they wouldn't have nearly as high of a valuation
    - tarsinge 5y ago
      > If that were the case, they wouldn't have nearly as high of a valuation Market cap is just number of stock x unit price. Apart from giving a (very rough) idea of how much it would cost to buy the company, it doesn’t say anything by itself. You can choose to see it as how a company is valuable if you think the market is efficient for that. But that high number could also be an accident of a handful speculative traders, because a variation in price change the whole market cap. Like if I pre mine a 1B of a crypto token and sell someone 1 for 1$ my token will have a market cap of 1B$, but that money is nowhere. The stock market could be more efficient, but there is no guarantee it is at time t for every stock.
- mcguire 5y ago
  Wasn't $270M Tesla's quarterly profit in January?
- 5y ago

by Arcuru 5y ago

londons_explore 5y ago

> The environmental impact was well known before they bought it, so it's a little odd that they'd reverse course because of that. I wonder if the original decision to accept bitcoin was a quick decision by the CEO, but now the rest of the company and the shareholders have persuaded them it isn't a public relations risk they should be taking. Imagine the headline - "Every Tesla EV bought with bitcoin gives off more CO2 than a gas car!"

qayxc 5y ago
Or - and this might sound a little tin foil-hat - this was a strategic move to send the price of Bitcoin down, so they can buy the 10% they sold in Q1 back at lower price. Crypto is an unregulated market with ridiculously high volatility and announcements or big buy-ins are a relatively safe method of controlling the price (to a degree). It's a win-win in the eyes of the management - great PR ("see - they DO care") and dropping crypto prices...
- drited 5y ago
  While a popular opinion, that does sound more tin foil hat to me than the alternative that he updated his knowledge in the last few months and/or had his opinion on Bitcoin changed by communication from others in the organisation. Tesla is a 568 billion market cap company. The profit it made on Bitcoin doesn't move the needle enough to justify some elaborate scheme to pump and dump. Musk is no stranger to whimsical decisions that, while involving a large amount of money in absolute terms, are not material in the context of the much larger value of his shares in Tesla.
  - qayxc 5y ago
    > [...] he updated his knowledge in the last few months and/or had his opinion on Bitcoin changed by communication from others in the organisation. The former idea is ridiculous - so the "Techno King of Tesla" (his choice of title, not mine) took months to learn that proof-of-work crypto produces a lot of CO²? Please... As for the latter, I doubt that to be the case with a person who allegedly acts like this: "If you said something wrong or made one mistake or rubbed him the wrong way, he would decide you’re an idiot and there was nothing that could change his mind." [0] > Tesla is a 568 billion market cap company. The profit it made on Bitcoin doesn't move the needle enough to justify some elaborate scheme to pump and dump. Excuse me? Tesla's Q1 net income was $438M, $101M of which the company attributed to selling crypto [1], that's a whopping 23% of their net profits. I'd say that's "moving the needle" quite a bit indeed. YMMV of course, but I'd like to think that close to a quarter of net income is quite substantial. [0] https://www.thesun.co.uk/news/7977370/elon-musk-fired-hundreds-tesla-employees-behaviour-erratic/ https://www.thesun.co.uk/news/7977370/elon-musk-fired-hundre... [1] https://www.cnbc.com/2021/04/26/tesla-tsla-earnings-q1-2021-.html https://www.cnbc.com/2021/04/26/tesla-tsla-earnings-q1-2021-...
    - croes 5y ago
      And the rest of the profit was from selling carbon credits. And now they are losing a big part of one large buyer. https://fortune.com/2021/05/05/tesla-selling-co2-credits-stellantis-loss-of-business/ https://fortune.com/2021/05/05/tesla-selling-co2-credits-ste...
    - drited 5y ago
      >>'took him months to learn' You say that like he didn't have two giant companies to run. He wasn't studying bitcoin all this time. >>Q1 profits Company valuation depends on decades of earnings. Current earnings matter little to the valuation of high growth companies. >>excuse me You're excused. It's clear that assessing public company valuations is not your area.
      - qayxc 5y ago
        > You're excused. It's clear that assessing public company valuations is not your area. Basic business economics doesn't seem to be your area. Here's a basic example of how you can shoot the "public valuation" of a company into Low Earth Orbit without actually earning a single penny for your operations: Issue 100 million shares at 0.01 cents per share and go public. That's now a $10k dollar public company. Next, you do an increase in capital stock by selling 1 million additional shares at 0.5 dollars per share to gullible investors. In order to achieve that, you hire a bunch of credible consultants who support your fundraiser by lending your company their good reputation and who advertise your business. You can pay them from the $500k you got from selling the new 1M shares and you can now call yourself a multi-millionaire, because the initial 100 million shares are now worth $50M on paper, because that's the latest share price. See how that works and why public valuation based on share value isn't always the most useful tool in assessing a company's finances? > Current earnings matter little to the valuation of high growth companies. See above for how a company can still be cash-starved from cost of operations and investments despite being worth billions on paper. Current earnings do matter, because the current share price doesn't pay wages or keeps the lights on in your Gigafactories. edit: I also find it quite amusing that you think the self-proclaimed "King of Doge" and co-founder of PayPal(!) doesn't know how crypto works, oh please.

mmahemoff 5y ago

From the linked statement: "Tesla will not be selling any Bitcoin" Edit: Yes, technically it’s future tense, but I’d be surprised if there were going to declare this without also disclosing any material amount they’ve already disposed of. It would do wonders for any charge of pump and dump.

bourgwaletariat 5y ago
Are you suggesting Elon Musk isn't honest? https://finance.yahoo.com/news/tesla-sold-bitcoin-q1-proceeds-202359810.html https://finance.yahoo.com/news/tesla-sold-bitcoin-q1-proceed...
- trompetenaccoun 5y ago
  Remember when he tweeted that the TSLA price was too high just so he could buy back stock at a lower price? Then after getting fined a measly $20 million he said it was "worth it". And to be fair, at least he's honest and open about his market manipulation, unlike other players. Shows us that he's able to get away with it. If this doesn't wake people up about the blatant manipulation that goes on in financial markets, I don't know what will.
- gpm 5y ago
  Future/past tense... that statement was future tense and simply be the rules of the english language excludes the sales you are referring to.
mrtksn 5y ago
What if he sold most of it already and simply won't sell anymore? The statements is about their intentions for the future, it's not about what they did or did not.
m3kw9 5y ago
Maybe he did a wallet transfer, then sold personally. Transfer the balance back to company. Semantics.
cableshaft 5y ago

hooande 5y ago

As far as pump and dumps go, this would make a very tiny amount of money for a company of Tesla's market cap. In another post someone said they made $270MM from selling bitcoin in Q1. On a market cap of close to $590B. And they can only really do that trick a few times at most. I have no idea what the true motivation for Tesla accepting bitcoin was. But I would be surprised if a publicly traded company took this much risk for such a relatively small amount

onlyrealcuzzo 5y ago
$270MM was >60% all of Tesla's $480MM Q1 profit.
- hooande 5y ago
  It's so unlikely that they can repeat this. Telsa is supposedly one of the most valuable companies in the world, as measured by market cap. There's no way they're depending on pump and dump schemes to sustain their profitability. If that were the case, they wouldn't have nearly as high of a valuation
  - tarsinge 5y ago
    > If that were the case, they wouldn't have nearly as high of a valuation Market cap is just number of stock x unit price. Apart from giving a (very rough) idea of how much it would cost to buy the company, it doesn’t say anything by itself. You can choose to see it as how a company is valuable if you think the market is efficient for that. But that high number could also be an accident of a handful speculative traders, because a variation in price change the whole market cap. Like if I pre mine a 1B of a crypto token and sell someone 1 for 1$ my token will have a market cap of 1B$, but that money is nowhere. The stock market could be more efficient, but there is no guarantee it is at time t for every stock.
mcguire 5y ago
Wasn't $270M Tesla's quarterly profit in January?
5y ago