Did Elon Musk Allegedly “Pump And Dump” Bitcoin To Manipulate Tesla’s Stock?

  • Tesla tried something new to juice earnings in the quarter, generating $101 million in income from selling about 10% of its Bitcoin stash.
  • Profits from Bitcoin and the sale of regulatory credits with tax benefits contributed about 25 cents to Tesla’s adjusted earnings of 93 cents a share.
  • Dave Portnoy used the words “pumps” and “dumps” referring to Tesla’s actions on Twitter, which prompted Musk to reply that “Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.”

Matt Levine from Bloomberg Opinion writes:

“I wrote back in February:

1. Tesla Inc. buys some Bitcoin.
2. Tesla announces that Bitcoin is good now and that it bought some.
3. The price of Bitcoin goes up, because institutional adoption of Bitcoin is good for its price, but also because, by the Elon Markets Hypothesis, anything that Musk buys goes up.
4. Tesla sells some Bitcoin, making a profit.
5. Musk tweets that the price of Bitcoin is too high.
6. Bitcoin prices go down due to the Elon Markets Hypothesis.
7. Go to Step 1.

Well, on Monday Tesla announced earnings, and guess what guess what guess what:

Tesla pulled a new lever to juice earnings in the quarter, generating $101 million in income from selling about 10% of its Bitcoin holdings.

Profit from the cryptocurrency and the sale of regulatory credits and tax benefits contributed about 25 cents to Tesla’s adjusted earnings of 93 cents 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.

That’s wonderful, my sincere congratulations to them. People want to be mad about this? There is a vague sense out there that it is somehow fraud to buy a thing, say you like it, and then sell some of it. For instance Dave Portnoy, who I guess is an investment celebrity now, used the words “pumps” and “dumps” to describe Tesla’s actions on Twitter, prompting Musk to reply that “Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet…”

See full story here.



Categories: Business, Tech

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