- Tesla gains more profits from its recent $1.5 billion Bitcoin investment.
- Tesla’s Bitcoin investment created validation of the cryptocurrency for some people.
- Tesla reported its first profitable year in fiscal 2020 with $721 million. This came after an $861 million loss in fiscal 2019.
With a rough estimate of 44,000 BTC purchased last week, Tesla earned over $780 million profits based on the Bitcoin price of $51,920, at the time of writing. Tesla’s Bitcoin investment also created validation of the cryptocurrency for some.
Other publicly-traded companies saw this as a stepping stone to make a similar move.
Tesla: More Profit in Bitcoin Than First Profitable Year
The Bitcoin purchase gain is also notable as it may be more than what Tesla made from its entire business in fiscal 2020. Although, Tesla currently faces more scrutiny over its BTC purchase.
In particular, Tesla reported its first profitable year in fiscal 2020 with $721 million. This came after an $862 million loss in fiscal 2019. Tesla said only a couple of quarterly profits before fiscal 2020.
The company said in its earnings report:
Despite unforeseen global challenges, we outpaced many trends seen elsewhere in the industry as we significantly increased volumes, profitability, and cash generation.
Tesla said that 2020 was a crucial year for the company. But 2021 will be even more critical as the company increases output at its China factory and targets. The company made the first production at new plants in Germany and the US state Texas.
The company reported $270 million in profits in the fourth quarter, up 157% from the year-ago period on a 46% increase in revenues to $10.7 billion.
Tesla Chief Financial Officer Zach Kirkhorn stated that the automaker had been affected by a shortage in semiconductors. It’s also beaten many of its competitors but explained the impact as temporary.
Tesla shares stand more than seven times their price from a year earlier. Hence, this places Tesla CEO Elon Musk in contention as the world’s wealthiest person.