A former equities CIO of Goldman Sachs drew on Twitter after suggesting Tesla should sell its Bitcoin [BTC] & repurchase company shares.
The price of TSLA shares has fallen 28% from $863.42 USD to $621.44 USD, since news broke on 8th Feb. that Tesla had made a $1.5 Bln BTC acquisition.
MicroStrategy’s shares have fared even worse within the short term. The firm, which is headed by Bitcoin bull run, Michael Saylor and just completed its latest acquisition of $15 Mln in BTC on 3rd March, is now down 50% from its all-time high of $1,315 USD from 9th Feb.
Tesla’s share market woes are likely due to a variety of things. Earlier in February, it had been reported that Tesla had been reprimanded by the Chinese government over internal control issues after receiving user complaints. The broader stock exchange has also experienced volatility, with the S&P 500 down 4.1% within the last 30 days.
On the other hand, the tweet from longtime Tesla analyst Gary Black, who has several decades of monetary management experience, sparked a debate on whether Tesla’s purchase of $1.5 Bln in Bitcoin [BTC] last month had benefited investors.
“I don’t need them purchasing back stock,” added Twitter user Techgnostik. “I want them investing in growth, and making another billion on their BTC position.”
Black countered by suggesting TSLA would also draw inclusion by more fund managers with a share buyback program, considering it of greater value to the investor than purchasing BTC “with excess cash.”
Some users on Twitter agreed that a purchase appeared to be a more appropriate use of funds, while others felt an excessive amount of attention was being paid to what Tesla did with 8% of their cash reserves.
It’s tough to determine the impact purchasing Bitcoin has had on a firm’s bottom line. While MicroStrategy’s share price has halved within a month, shares of MSTR are still up 340%, [from $146.63 USD to $645.66 USD], since the firm revealed that its first purchase of 21,454 BTC on 11th Aug. 2020. the worth of BTC is presently up 310% from the same date.