Tesla has $1.9 billion in Bitcoin holdings.
Justin Sullivan/Getty Images
Tesla stock seems to fall on Mondays —and the start to this week was no different. Today’s drop appears to be a new issue for the electric vehicle maker: Bitcoin. Investors are growing tired of the distraction.
Shares of Tesla (ticker: TSLA) were down 3.8% at 2:09 p.m. The S&P 500 and Dow Jones Industrial Average were down 0.3% and 0.5%, respectively.
The pattern emerged a couple of weeks ago, The slide starts on Monday and rolls on through Thursday. Friday brings a rally, evidence that investors are felling more bullish as they head into the weekend.
Whether Friday should be a day for recovery is something investors might want to rethink since Bitcoin trades day and night on several exchanges. And that gives Musk the opportunity to move crypto markets with his tweets even on Saturdays and Sundays.
On Wednesday, Musk tweeted that Tesla wouldn’t accept Bitcoin for payment anymore because of environmental reasons—computers “mining” the crypto use a lot of electricity. A couple of hours after the post, Bitcoin had dropped 15%
On Sunday, Musk sent Bitcoin tumbling again after indicating that he might sell or has already sold Tesla’s $1.9 billion Bitcoin stake in light of all the criticism he took for last week’s tweet.
Then, Musk tweeted that Tesla hasn’t sold any Bitcoin, but the damage was done: Bitcoin is down about 9% since Friday night, shedding about $4,500 a coin.
Tesla disclosed its initial $1.5 billion Bitcoin stake in February; since then, shares are down about 32%. The Nasdaq Composite is also down about 4% over the same period. A primary reason is that higher interest rates and a recovering economy has resulted in a rotation out of high-growth names such as Tesla and into more cyclical stocks.
Still, Bitcoin has become a distraction for investors and management.
If Musk, or Tesla’s board, agrees that Bitcoin has become enough of a distraction, the selling of Tesla’s 40,000-plus coin stash would be a another big fundamental factor for crypto traders to consider.
Tesla investors, however, would likely be grateful for one less thing to worry about.
Write to Al Root at [email protected]
