Tesla is facing significant financial challenges due to Bitcoin’s recent plunge. A new accounting rule mandates that Tesla must report unrealized gains and losses from its Bitcoin holdings, leading to an estimated unrealized loss of over $300 million in Q4 on its 11,509 Bitcoin. This decline could reduce Tesla’s GAAP earnings per share (EPS) by approximately $0.10. If Bitcoin further drops to $60,000, unrealized losses may exceed $600 million, impacting EPS by about $0.19. With FactSet analysts predicting a Q4 net income of $1.6 billion and GAAP EPS of $0.37, these additional losses present a substantial earnings headwind. As Tesla navigates existing margin pressures, Bitcoin’s volatility introduces further uncertainty. Investors should closely monitor Bitcoin’s performance, as its fluctuations stand to considerably affect Tesla’s financial outlook. This situation underscores the broader market risks associated with cryptocurrency investments and their impact on corporate earnings.
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