Electric car makers Tesla have lost more than $ 55 billion in market value since announcing the purchase of $ 1.5 billion Bitcoin four days ago, but Twitter and MasterCard have moved in a different direction.
Since Tesla’s announcement Monday, the share price of electric vehicles has fallen 7% from $ 869.52 (market value $ 834.6 billion). It is currently trading at $ 811.66 (market value $ 779 billion).
While there may be other factors behind the drop in stock prices, some investors, such as the chief strategist at Baker Avenue Wealth Manager King Leap, are concerned that keeping 8% of the company’s cash reserves in a volatile asset represents unnecessary risk, they say. :
“This will increase the volatility of stocks due to the effect of Bitcoin. It is better for Bitcoin than Tesla.”
Tesla shares have been known to ignore the view of financial analysts in general: Financial magazine Barron claims that since 2018, no more than 40% of analysts have classified their shares as “buy”.
Gary Black, a former Bernstein analyst and bitcoin skeptic, said he would sell his Tesla shares if they added bitcoin to the balance sheet. In keeping with his word, he announced his retirement on Twitter, but also added that he will be returning:
In just 90 minutes, it revised the automaker’s forecast to $ 960, just $ 40 less than its previous estimate of $ 1,000. This prompted some Twitter users to question whether he really believed in his numbers since he just left his post. .
The deal involved the younger brother of Elon Musk and Tesla Chairman Kimball Musk, who sold 5% of his shares for $ 25.6 million. Another manager, Antonio Gracias, also sold more than 150,000 shares the day after the Bitcoin announcement, according to the Securities and Exchange Commission.
Despite the time, there is no evidence that this sale is related to the latest bitcoin news. In this regard, it is unclear what effect buying Bitcoin will have on the share price, given that news also emerged this week that Chinese authorities had contacted Tesla to negotiate quality issues with their electric cars.
It is also clear that not all equity investors are against Bitcoin. Shares of the social giant Twitter have risen sharply after comments that the company may soon buy bitcoin. During an interview with Squawk Box on CNBC on February 10, technology company CFO Ned Segal said the company is considering adding cryptocurrency to its own books and using it to pay Twitter employees.
Over the two days following the interview, Twitter shares rose nearly 15% from $ 59.88 to $ 68.56, just below the full-time level of $ 69.
Likewise, MasterCard shares rose 4% after announcing support for several cryptocurrencies in its network this week.
Large companies investing in Bitcoin won’t necessarily result in a much higher market value: if Apple, Microsoft, Facebook, Twitter, MasterCard and Google invest 8% of their cash reserves in Bitcoin, it would result in an investment of less than $ 8 billion in Total. This is less than 1% of Bitcoin’s current market value. However, the signal sent by other companies and retail investors is likely to join this team.