Elon Musk has hit back at a critic who claimed he pumped and dumped Bitcoin to “make a fortune” after Tesla reported first quarter earnings that surpassed market expectations.
The electric carmaker reported net income of $438 million for the quarter ending in March, while total revenue grew 74 percent year-on-year.
Analyst estimates had put total earnings at 79 cents per share, but Tesla ended up reporting 93 cents per share.
In addition, the company said it had delivered just under 185,000 cars in the first quarter while it built around 180,000.
But the company’s profits do not just come from the sale of cars. Tesla also owns a significant amount of the cryptocurrency Bitcoin, worth $1.5 billion at the time of purchase.
The company appears to have sold 10 percent of its Bitcoin portfolio in the first quarter, which it said had a “positive impact” of $101 million on revenues.
On Monday, Dave Portnoy, founder of Barstool Sports, called out Musk, CEO of Tesla, on the Bitcoin sale.
He tweeted: “So am I understanding this correctly? Elon Musk buys Bitcoin. Then he pumps it. It goes up. Then he dumps it and makes a fortune.”
Musk replied: “No, you do not. I have not sold any of my Bitcoin. Tesla sold 10 percent of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.”
In a transcript of the Q1 2021 earnings call posted by the Motley Fool, Tesla CFO Zachary Kirkhorn said the company intends to hold its Bitcoin investment long-term and called it “a good place to place some of our cash that’s not immediately being used for daily operations”.
Bitcoin was worth roughly $40,000 in early February at the time Tesla’s $1.5 billion investment was reported. It rose to a high of more than $63,000 in mid-April before falling again to its current price of around $54,500.
Cryptocurrencies such as Bitcoin are infamous for their price volatility. Musk himself is popular within the community for Dogecoin—a type of joke cryptocurrency—because his tweets in support of the token have been associated with its price rising.
Despite this Kirkhorn said Tesla had been “quite pleased with how much liquidity there is in the Bitcoin market.”
In March, Musk announced via Twitter that Tesla customers could purchase a car using Bitcoin as a payment option.
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