Tesla Details $140 mn Bitcoin Loss In SEC Filing

According to the 30th Jan filing with the US Securities and Exchange Commission, Tesla lost more than $140 million betting on Bitcoin last year. In 2022, the electric vehicle manufacturer took a $204 million impairment charge while earning $64 million from Bitcoin conversion.

“In the year ended December 31, 2022, we recorded $204 million of impairment losses resulting from changes to the carrying value of our Bitcoin and gains of $64 million on certain conversions of bitcoin into fiat currency by us,” Tesla said in the filing.

An impairment charge is a charge that describes a decrease or loss in the value of an asset. It can happen as a result of a change in economic circumstances, such as the crypto winter that gripped the market after Terra Luna's collapse in May 2022.

The SEC filing comes less than a week after Tesla's quarterly earnings report, which included no Bitcoin transactions but saw the value of its holdings fall, resulting in a $43 million loss for the last four months of 2022.

Tesla invested $1.5 billion in Bitcoin in February 2021, making it one of the largest corporate holders of the cryptocurrency, second only to MicroStrategy.

Tesla's impairment losses have nearly doubled since 2021, when the company reported a $101 million loss on digital assets and a $128 million gain after selling Bitcoin in an SEC filing that year.

Tesla reported to investors in October 2022 that it still had over $218 million in Bitcoin after selling 75% of its holdings in July for $936 million.

Tesla refers to its Bitcoin holdings as indefinite-lived intangible assets in the filing. These assets are reviewed on a regular basis to determine if their balance-sheet value exceeds their fair market value. These impairment charges, as Tesla explained, may have an impact on the company's future investment in Bitcoin.

(With inputs from Shikha Singh)

1 months ago