The company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash,” according to the filing. In addition to the purchase, Tesla said it would start accepting payments in bitcoin in exchange for its products as well. That would make Tesla the first major automaker to accept bitcoin as payment.
The move raised immediate questions around CEO Elon Musk’s behavior on Twitter recent weeks, where he has been credited for increasing the prices of cryptocurrencies like bitcoin and dogecoin by posting positive messages about them and therefore encouraging more people to buy.
Bitcoin prices surged to new highs Monday following Tesla’s announcement, reaching a price of at least $43,200. Tesla shares were up more than 2% in premarket trading. Tesla warned investors of the volatility of bitcoin’s price in its SEC filing.
Tesla’s move Monday represents an investment of a significant percentage of its cash in the investment. The company had more than $19 billion in cash and cash equivalents on hand at the end of 2020, according to its most recent filing.
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