$50B wiped from Tesla after BTC buy — but MasterCard and Twitter surge

Electric vehicle maker Tesla has seen a wipeout of more than $ 55 billion of market value since announcing it bought $ 1.5 billion in Bitcoin four days ago – but Twitter and MasterCard go the other way.

Since Tesla’s announcement on Monday, the electric car giant’s share price has fallen 7% from $ 869.52 (market value $ 834.6 billion) amid a strong reaction from the financial world. It is currently trading at $ 811.66 ($ 779 billion).

Some investors, such as King Leap, chief wealth strategist at Baker Avenue, are concerned that keeping 8% of the company’s cash reserve in a volatile asset represents unnecessary risk, he says:

“It will add volatility to the stock due to Bitcoin exposure. This is better for Bitcoin than it is for Tesla.”

Tesla stock is known to ignore the opinion of financial analysts in general as the financial magazine Barron reports that no more than 40% of analysts have classified its shares as “buy” since 2018, however, this time it has taken a big hit.

Former Bernstein analyst and bitcoin skeptic Gary Black advertiser Two weeks ago he would sell his Tesla shares if they added Bitcoin to the balance sheet. True to his word, he is Advertise He left it on Twitter, but also added that it will be back:

Only 90 minutes later it is Review His prediction for the carmaker’s stock will be at $ 960, just $ 40 down from the previous estimate of $ 1,000. This led some Twitter users to A question If he really believes his numbers since he just left office.

The sale included Elon Musk’s younger brother and Tesla manager Kimbal Musk, who sold 5% of his shares for $ 25.6 million. Another manager, Antonio Gracias, sold more than 150,000 shares one day after the Bitcoin announcement, according to securities filings.

Despite the timing, there is no evidence that these sales are related to recent Bitcoin news.

However, it is clear that not all equity investors are hostile to Bitcoin. Social giant Twitter has surged after comments that the company may soon buy Bitcoin. During an interview with Squawk Box on CNBC on February 10, technology company’s chief financial officer Ned Segal said the company is considering adding cryptocurrency to its own books and using it on Twitter employee salaries.

In the two days following the interview, Twitter shares rose nearly 15% from $ 59.88 to $ 68.56, close to an all-time high of $ 69.

Likewise, MasterCard stock is up 4% after announcing support for multiple cryptocurrencies on its network this week.

Big companies investing in Bitcoin won’t necessarily translate into much higher market capitalization: If Apple, Microsoft, Facebook, Twitter, Mastercard, and Google invested 8% of their cash reserves in Bitcoin, that would only translate into less than $ 8 billion investment in total. . This is less than 1% of Bitcoin’s current market value. However, the signal it sends is likely to push other companies and individual investors to join the shopping cart.