TSLA Stock: Bitcoin Just Saved the Day for Tesla’s Q2

Tesla’s (NASDAQ:TSLA) 2022 second-quarter earnings report is in. While revenue has fallen from where it was at the end of Q1, it surpassed Wall Street expectations in multiple key areas. What saved the company’s balance sheet, though, is the fact that Tesla offloaded 75% of its Bitcoin (BTC-USD) holdings, generating $936 million in cash.

Prior to the report, some experts expressed concern that negative earnings would harm TSLA stock. But the fact that shares jumped 7% this morning should remind Wall Street that Tesla cannot be kept down.

TSLA Stock After Q2 Earnings

By how much did Tesla top analyst estimates? Not by much, but by enough for it to matter. It reported revenue of $16.9 billion, opposite the $16.88 billion predicted by Wall Street. Tesla’s adjusted earnings-per-share (EPS) of $2.27 also came out just above the projected $1.83. As Yahoo Finance reports, “the electric automaker’s revenue took a significant quarter-over-quarter hit in Q2, falling from $18.76 billion in Q1 2022, but rose year-over-year from $11.95 billion.” This good news has pushed TSLA stock to more than 10% gains for the week.

Today, investors are celebrating TSLA stock averting a potential negative catalyst. But while they do, it is important to keep in the mind the effect of Tesla selling off so much Bitcoin. Elon Musk has long been a vocal supporter of the crypto. In July 2021, he stated, “I might pump, but I don’t dump … I don’t believe in getting the price high and selling, and I would like to see Bitcoin succeed.”

Tesla reminded investors of its commitment to the crypto during its Q1 earnings report. “We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash,” it said. Shortly thereafter, Musk tweeted he would not be selling his crypto holdings.

This doesn’t mean that Musk has necessarily walked back his pro-crypto stances. But it does mean he saw an opportunity to help stop TSLA stock from falling at a critical moment. While Bitcoin has shed 37% of its value over the past six months as crypto markets plunged, it has risen more than 8% over the past week. Selling its BTC holding while the coin was on the rise made a lot of sense for Tesla, as it led to a more positive earnings report, keeping investors satisfied.

What’s Next for Bitcoin?

At a time when the Shanghai shutdowns negatively affected Tesla’s bottom line, selling Bitcoin brought the cash influx it needed. Investors can now take comfort in the fact that TSLA stock is in the clear to keep rising as it moves into a better quarter. Things don’t look so rosy for Bitcoin, though. Tesla’s massive offload has sent the crypto’s prices down almost 1% so far today.

However, once markets adjust and stabilize, Bitcoin will likely start rising again. Crypto momentum has been slowly growing as investors move on from the recent crash. And as InvestorPlace contributor Mark Hake notes, history indicates Bitcoin’s price is likely to double as it moves forward after bottoming. Tesla selling its Bitcoin holdings doesn’t mean other investors won’t be interested, especially at its current beaten-down price point.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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