Announcing that it will invest in Bitcoin (BTC) and allocate $ 1.5 billion for it, the electric car manufacturer Tesla has lost more than $ 55 billion in market value since then.
Following Tesla’s announcement on Monday, the share price of the electric car giant fell 7 percent from $ 869.52 ($ 834.6 billion market value). It is currently trading at $ 811.66 ($ 779 billion market value).
While there are other factors behind the fall in share prices, some investors, such as King Lip, chief strategist at Baker Avenue Wealth Management, made a worried statement that keeping the price of 8 percent of the company’s cash reserve in a volatile asset is an unnecessary risk:
“The volatility in the stock price will increase due to the purchase of Bitcoin. This will benefit Bitcoin, not Tesla.”
Finance magazine Barron has rated Tessa shares as “Buy” by more than 40 percent of analysts since 2018.
Gary Black, a former Bernstein analyst who doesn’t like Bitcoin, said two weeks ago that he would sell Tesla shares if Bitcoin was added to the balance sheet. told. Keeping his word, he made his debut on Twitter. announcedbut signaled that it would return:
3/ I’ve made a lot of money on $TSLA over the past 18 months, and will look for a lower entry point to get back in. I will continue to post my views on Twitter about TSLA volumes, earnings and other developments. I thank everyone for your past and hopefully continued support.
— Gary Black (@garyblack00) February 8, 2021
After only 90 minutes, the automaker’s stock forecast was reduced to $ 960, just $ 40 down from the previous forecast of $ 1,000. updated.
While the timing is meaningful, there is no clear evidence that the sales are related to Bitcoin news. It is also unclear what effect the Bitcoin purchase has on the share price. Because this week, reports have emerged that there is a request for discussion by the Chinese government regulators on the quality problems of Tesla’s electric cars.