Musk Says Tesla Sold Bitcoin to Prove Liquidity as Cash Alternative

TechCrunch

Tesla sees bitcoin as important financial tool to access cash quickly

Tesla’s relationship with bitcoin is not a dalliance, according to the comments made by the company’s CFO and dubbed “master of coin” Zach Kirkhorn during an earnings call Monday. Tesla invested $1.5 billion in bitcoin this quarter and then trimmed its position by 10%, Kirkhorn said during the company quarterly earnings call. Tesla also allows customers to make vehicle deposits and final vehicle purchases using bitcoin.

Bloomberg

Tesla’s Record Profit, Bitcoin Gains Are Met With a Shrug

(Bloomberg) — Tesla Inc. earned record profit in the first quarter, sidestepped an industry chip shortage, improved its manufacturing and even made money off Bitcoin.And yet shares of the EV maker fell as much as 3.1% in late trading after results were announced Monday, a sign of the lofty expectations Tesla now contends with after an eightfold gain in the stock last year. Among the quibbles from analysts: Tesla didn’t offer a specific estimate for vehicle deliveries in 2021.Chief Executive Officer Elon Musk is pushing to ramp up production and maintain Tesla’s dominance in the electric vehicle market, but competitors are moving in aggressively. Musk said Monday demand is higher than it’s ever been, but without more numbers to go on, investors shrugged.“It’s all good, but there’s not a lot of news and it wasn’t a blowout,” said Gene Munster of Loup Ventures. “Everything happened that people thought would happen.”Bitcoin BoostThe company pulled a new lever to juice earnings in the quarter — Bitcoin — generating $101 million in income after selling about 10% of its holdings.Profit from Bitcoin, regulatory credits and tax benefits contributed about 25 cents to Tesla’s adjusted earnings of 93 cent a share, allowing the carmaker to beat Wall Street’s 80-cent average estimate, Dan Levy, an analyst with Credit Suisse, wrote in a note Monday.Tesla Chief Financial Officer Zachary Kirkhorn said Tesla values Bitcoin as a way to store cash while preserving liquidity, especially with traditional investment yields being so low.“We do believe long-term in the value of Bitcoin,” he said on a conference call. “It is our intent to hold what we have long-term and continue to accumulate Bitcoin from transactions from our customers as they purchase vehicles.”Bitcoin gained as much as 1.9% and traded above $54,000 after that reaffirmation of Tesla’s commitment to the cryptocurrency.The company disclosed its purchase earlier this year and also said it would accept it as a form of payment. That surprise announcement helped increase the legitimacy of Bitcoin and spurred a rally in its value.Chip Shortage WoesTesla’s results kick off a year in which the Palo Alto, California-based automaker will be expanding operations on three continents, including completing new factories in Austin, Texas, and Berlin. Tesla said it expects 50% annual growth in deliveries “over a multi-year horizon,” which is consistent with its previous wording. That implies deliveries of about 750,000 cars this year.But that failed to excite investors — and analysts who had hoped for additional guidance from Musk on the call were disappointed.Tesla fell 2.5% to $719.86 in late aftermarket trading. It closed the session up 1.2% to $738.20.The company delivered more than a half million cars in 2020 and reported deliveries of 184,800 cars worldwide in the first quarter, topping the final three months of 2020 by about 4,000 vehicles — despite a shortfall in supplies of semiconductors.Read more: The World Is Short of Computer Chips. Here’s Why: QuickTakeTesla and other automakers had to cope with strained supplies of chips and other materials, an unexpected headache that comes as they have been ramping up production to meet higher consumer demand amid the pandemic. Consultant AlixPartners has said the chip shortage could cost automakers $61 billion in lost sales this year.“This is a huge problem,” Musk said on the call. “Q1 had one of the most difficult supply chain challenges that we’d ever experienced.”The CEO said he expects the shortages to continue to impact the company in the current and third quarters.Growing EV PieThe EV market leader faces a new wave of competition from several new models being launched this year by startups such as Amazon.com Inc.-backed Rivian Automotive Inc. and established automakers including General Motors Co. and Volkswagen AG.Tesla sought to assure investors in its quarterly release by noting growing demand for EVs and its own efforts to rapidly expand production capacity. “As more OEMs join our mission by launching EVs, we believe consumer confidence in EVs continues to increase and more customers are willing to make the switch,” it said in a statement.Tesla’s first-quarter revenue grew 74% to $10.39 billion in the January through March period, close to analysts’ estimates for $10.41 billion. Sales of regulatory credits rose to $518 million this quarter, up from $401 million in the last quarter of 2020.The company earns more money selling those credits to other automakers than it does from its core business of making and selling cars. That’s a potential issue for Tesla as more established carmakers start to offer their own line-up of EVs — and may not need to buy as many credits in the future despite tightening carbon-emissions standards globally.Tesla indicated it is getting better and more efficient at building cars. Its automotive gross margin of 26.5% came in above the Bloomberg consensus of 24.2%. The company attributed the boost to cost-cutting that outpaced lower average selling prices.Fatal Crash QuestionsThe company challenged concerns about a fatal crash of a Model S in Texas earlier this month, saying it believes someone was in the driver’s seat at the time. Tesla cautioned it hasn’t been able to retrieve all the data from the vehicle, which counters initial police comments that “no one” was was driving. That led to speculation that Autopilot, Tesla’s name for its driver assistance feature, was a possible factor in the fatal crash.“We were able to find that the steering wheel was indeed deformed, leading to the likelihood that someone was in the driver’s seat at the time of the crash,” Lars Moravy, Tesla’s vice president of vehicle engineering, said on the company’s earnings call.The automaker is working with federal regulators in their investigations, Moravy said.The crash near Houston killed two men and triggered probes by the National Highway Traffic Safety Administration and the National Transportation Safety Board.Read more: Tesla Crash Spurs Probes After Two Die With ‘No One’ Driving(Updates with CFO comment in eighth paragraph; Adds detail throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Reuters

Tesla’s Elon Musk qualifies for $11 billion options payout

Tesla’s quarterly report on Monday hit targets qualifying Chief Executive Elon Musk for two options payouts worth a combined $11 billion. It reported quarterly revenue of $10.39 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.84 billion, surpassing milestones that trigger the vesting of the fifth and sixth of 12 tranches of options granted to Musk in his 2018 pay package to buy discounted Tesla shares.

Yahoo Finance Video

Tesla down after posting earnings

Tesla reported an adjusted EPS of 93 cents per share and revenue of $10.39B vs. an estimated adjusted EPS of 80 cents per share and an estimated revenue $10.41B. Yahoo Finance’s Jared Blikre joins to break down the key metrics for Tesla’s quarterly earnings.

Bloomberg

Ant Valuation Seen Falling to $29 Billion in Worst-Case Scenario

(Bloomberg) — Ant Group Co.’s valuation could plummet to as low as $29 billion after becoming a financial holding company that’s regulated more like a bank, according to Bloomberg Intelligence.The regulatory clampdown could push Ant’s revenue growth to the low teens compared with 30% in November, dragging down profit prospects, analyst Francis Chan wrote in a report on Tuesday. Ant’s valuation could drop to a range of $29 billion to $115 billion, from $320 billion previously, he forecasts.Ant’s valuation could come to resemble those of banks and other mainstay financial institutions, Chan said. The fintech company is facing curbs on all fronts, from online lending to payments, wealth management and insurance.The company’s consumer lending units Huabei and Jiebei could suffer with their links being removed from Alipay, which has a billion users, Chan said. Ant will face more restrictions accessing and using personal information via credit investigations, he added. The company also needs to lower the balance of its Yu’ebao wealth management service, which plunged 18% in the first quarter.“Ant Group’s future as China’s fintech giant could be characterized by diminished greatness, with or without Jack Ma,” said Chan. Ma currently holds a controlling stake in the company.If Ant is seen like a traditional lender, even a fast-growing one such as China Merchants Bank Co., its valuation might not stretch beyond 487 billion yuan ($75 billion) to 492 billion yuan, Chan said. In the downside scenario, the market may assess Ant similar to the MSCI China Financials index, which implies a value of 186 billion yuan to 245 billion yuan.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

The Telegraph

Gaming apps set to be hardest hit by Apple iOS 14.5 tracking crackdown

Gaming apps were set to be hardest hit by Apple’s new privacy crackdown on Monday as the iPhone launched its new consent pop-ups to help consumers understand how much data apps tracks. Research by the mobile advertising firm AppsFlyer found an average of only 21pc of iPhone users choosing to let gaming apps access their personal data when shown one of the smartphone giant’s data collection warnings. That was lower than the average for all apps at 26pc and far below the rates enjoyed by photography and shopping apps, at 44pc and 35pc. Some types of gaming apps persuaded as few as 15pc. The figures were an early indication of how Apple’s latest operating system update, released last night, will affect iPhone app makers who have depended for years on being able to track users’ identities across different apps. Users will see pop-ups for some apps as soon as they install iOS 14.5. Facebook and Google’s mobile advertising systems are built on the same ability, which will now be cut off unless users agree to be tracked. Both companies have warned that the changes will hurt their revenue, and analysts will be closely watching the guidance they give when they report their first quarter earnings on Tuesday (for Google) and Wednesday (for Facebook).

Investopedia

How to Make Money with YouTube (GOOG)

YouTube is the third most visited site in the world, and numerous people are making money thanks to the site’s popularity. Here’s how you can do it.

Reuters

Toyota’s acquisition of Lyft’s self-driving unit bolsters its automation ambitions

AUSTIN/TOKYO (Reuters) -Toyota Motor Corp will acquire Lyft Inc’s self-driving technology unit for $550 million, the companies said, as the Japanese firm steps up its automation ambitions with the newly created Woven Planet division. The acquisition of Level 5 automation will also provide Toyota access to the U.S. ride-hailing firm’s more than 300 employees of the essentially complete autonomy technology.

Reuters

GameStop raises $551 million to accelerate e-commerce push, shares jump

The company’s stock has gained more than 850% this year thanks to a push by retail investors to drive up prices of heavily shorted stocks. GameStop said earlier this month George Sherman will step down as its chief executive officer in the biggest management shakeup at the retailer, giving top shareholder Ryan Cohen more control. Cohen, whose RC Ventures owns nearly 13% of GameStop, is leading the company’s transformation into an e-commerce firm that can compete with big retailers such as Walmart Inc, as well as technology companies like Microsoft Corp and Sony Corp.

Reuters

Bengaluru, facing India’s second-highest COVID-19 surge, to enter lockdown

The city of Bengaluru, home to the technology operations of hundreds of global companies, is to enter a two-week lockdown as India battles a sharp surge in COVID-19 infections, officials said on Monday. Karnataka state, of which Bengaluru is capital, will also lock down from Tuesday evening for 14 days, the state chief minister, B.S. Yediyurappa, told reporters after a cabinet meeting. The region is the latest to impose restrictions after similar lockdowns or curfews in many parts of India, which is in the middle of a massive second wave of infections that has swamped its health system.

Reuters

Goldman Sachs watching total margin loans after Archegos fund blowup -executive

NEW YORK (Reuters) -Executives at Goldman Sachs Group Inc are monitoring the total amount of loans borrowed on margin after the collapse of investment fund Archegos Capital Management last month, the bank’s President and Chief Operating Officer John Waldron said on Monday. Speaking at a virtual meeting held by the Economic Club of New York, Waldron said the total amount of margin debt industry-wide is about $800 billion, a roughly $300-billion increase over the past year. “That’s an extraordinary (level) of margin debt,” Waldron said.

Reuters

Analysis: Retail trading appetite robust even as stock-buying frenzy cools

Retail traders have shifted from “meme stocks” to large-cap names and exchange traded funds, and while their activity has eased from its January peak, the blistering pace of new retail account openings means non-professionals are likely to remain a market force. Retail trading levels skyrocketed at the beginning of the year, helped by the frenzy of buying in stocks like GameStop Corp. But that has been followed by a pullback, according to data, despite expectations that investors would use stimulus checks to trade. Liu said small investors who sold favorites like GameStop in February or March likely got burned, as most of the names retail piled into in January fell between 20% and 30%.

Reuters

Tesla’s Elon Musk qualifies for $11 billion options payout

Tesla’s quarterly report on Monday hit targets qualifying Chief Executive Elon Musk for two options payouts worth a combined $11 billion. It reported quarterly revenue of $10.39 billion and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.84 billion, surpassing milestones that trigger the vesting of the fifth and sixth of 12 tranches of options granted to Musk in his 2018 pay package to buy discounted Tesla shares.

Bloomberg

JPMorgan Is Preparing to Offer a Bitcoin Fund to Wealthy Clients

(Bloomberg) — JPMorgan Chase & Co. is preparing to offer a Bitcoin fund to wealthy clients, the latest sign that Wall Street is warming to the largest cryptocurrency after it soared in recent months.The actively managed fund will be available as soon as this summer, CoinDesk reported Monday, citing sources familiar with the plans. NYDIG will be the custody provider, a person with knowledge of the situation said, asking not to be identified because the decision hasn’t been made public.Spokespeople for JPMorgan and NYDIG declined to comment.Bitcoin rose as much as 12% Monday morning to trade at almost $54,000, the biggest intraday gain since early February.Wall Street banks are grappling with whether to offer clients exposure to cyptocurrencies after staying mostly on the sidelines as Bitcoin and other tokens surged in popularity. JPMorgan has been taking some of the biggest strides, adding Bitcoin exchanges Coinbase Inc. and Gemini Trust Co. as banking clients last year. The firm also turned to crypto to help speed up corporate payments, launching JPM Coin in 2019.JPMorgan co-President Daniel Pinto said last week that the firm will “accompany the clients” when it comes to Bitcoin. The biggest U.S. bank joins Morgan Stanley in planning to offer rich clients access to funds that enable ownership of Bitcoin.Read more: Morgan Stanley to Offer Rich Clients Access to Bitcoin FundsFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Reuters

As U.S. capital gains tax hike looms, wealthy look for ways to soften the blow

Wealth advisers are counseling clients to max out their retirement accounts, park gains in tax-deferred opportunity zone funds and even sell some assets to avoid being clobbered by a potential U.S. capital gains tax hike. The White House will this week propose nearly doubling taxes on capital gains to 39.6% for people earning more than $1 million, Reuters and other media outlets reported, in what would be the highest tax rate on investment gains since the 1920s. Any changes will be hard-fought in Congress, where Democrats hold a slim majority, and the final tax rate will likely be lower than the White House’s opening salvo.

Reuters

Exxon retreated from oil trading in pandemic as rivals made fortunes

Exxon Mobil’s effort to build an energy trading business to compete with those of European oil majors unraveled quickly last year as the firm slashed the unit’s funding amid broader spending cuts, 10 people familiar with the matter told Reuters. The cuts left Exxon traders without the capital they needed to take full advantage of the volatile oil market, these people said. The coronavirus pandemic sent prices to historic lows – with U.S. oil trading below zero at one point – before a strong rebound.