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In brief
This morning, an SEC filing revealed that Tesla has made a $1.5 billion investment in Bitcoin.
Gary Black, a former Goldman Sachs executive, said on Twitter that he’s exited his Tesla positions.
He’s saying the Bitcoin investment is risky for shareholders.
Crypto devotees are predictably enthused by Tesla’s $1.5 billion investment in Bitcoin, but one shareholder isn’t as pleased.
Gary Black, a private investor and former Goldman Sachs executive who’s become something of an influencer (he has nearly 50,000 followers on Twitter), said this morning that he’s out on Tesla, for now.
“I have exited my $TSLA positions after being long since August 2019,” he tweeted. “The absence of clear FY’21 delivery guidance, increased odds of a 1Q miss, and a more risky capital allocation policy/higher earnings variability were the primary factors.”
Disclosure: I have exited my $TSLA positions after being long since August 2019. The absence of clear FY’21 delivery guidance, increased odds of a 1Q miss, and a more risky capital allocation policy/higher earnings variability were the primary factors.
He elaborated on that “risky capital allocation” comment in another post: "TSLA has always been higher risk, but investing $1.5B in Bitcoin makes it more risky," he tweeted.
$TSLA has always been higher risk, but investing $1.5B in #Bitcoin makes it more risky: 1/ Missed 1Q non-GAAP EPS est by 25% ($.80 vs $1.03 est) 2/ Didn’t give FY’21 deliv guidance, and instead reiterated 50% L/T vol growth goal 3/ 4Q EV share (19.6%) and Auto GM % disappointing
Black has reason to worry: Bitcoin is notoriously volatile, and while the market has been way up over the past few months, there’s no guarantee it will stay that way. After Bitcoin shot up to an all-time high in late 2017, it lost nearly half its value just a few days later. And last month, the price of Bitcoin dropped by about a fifth in the span of a single day.
