Over 1 Trillion KRW in Holdings at Year-End
Stock Price Up 2.9%
Electric vehicle company Tesla, led by Elon Musk, saw a sharp increase in net profit as it reflected the market value of its Bitcoin holdings in its earnings according to the revised accounting standards for the fourth quarter of last year.
According to Tesla's earnings report on the 30th (local time), $600 million (approximately 871.8 billion KRW) of the $2.3 billion (about 3.342 trillion KRW) net profit recorded in the fourth quarter of last year came from digital assets.
The value of digital assets held by Tesla at the end of the third quarter of last year was only $184 million (about 267.3 billion KRW), but it rose to $1.076 billion (about 1.5634 trillion KRW) in the fourth quarter. This nearly tenfold surge was due to the rise in Bitcoin prices and the revaluation of holdings following the change in accounting standards.
Tesla Chief Financial Officer (CFO) Vaibhav Taneja explained during a conference call the previous day, "Due to the change in accounting standards for digital assets, the market value gain on Bitcoin increased by $600 million, which impacted the net profit for the fourth quarter of last year."
According to CNBC, due to policy changes by the Financial Accounting Standards Board (FASB) in the United States, companies must report digital asset holdings at market price starting this year. The previous regulation required Bitcoin's value to be recorded at the lowest price during the holding period. Tesla disclosed that it purchased $1.5 billion worth of Bitcoin in the first quarter of 2021 but revealed in its 2022 report that it had sold 75% of its Bitcoin holdings by the end of that year.
Additionally, CNBC reported that Bitcoin tracking website Bitcoin Treasuries ranked Tesla as the sixth-largest publicly traded company holding Bitcoin.
Although Tesla's electric vehicle sales in the fourth quarter of last year decreased by 8% compared to the same period the previous year, falling short of market expectations, CEO Musk attracted market attention by announcing, "We will launch a paid fully autonomous driving (FSD) service without driver supervision in Austin, Texas, this coming June."
Tesla's stock price closed up 2.87%, surpassing $400 on the day.
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