Since Tesla announced the company held $ 1.5 billion in Bitcoin on its balance sheet for the first week of February, the company’s shares have fallen over 30%. An analyst says Tesla shareholders would be “very supportive” if the company announced the sale of the Bitcoin. In addition, Microstrategy’s shares have fallen significantly in the past 30 days after multiple announcements to buy Bitcoin Treasuries.
Critics say Tesla should sell Bitcoin
After Tesla announced to the world that it had $ 1.5 billion worth of Bitcoin (BTC) on its balance sheet, the price of BTC soared that day. However, 30 days later, Tesla (NASDAQ: TSLA) shareholders don’t seem that excited about the idea. Additionally, critics and even lawyers on social media and forums have urged companies like Tesla to make such decisions. Tesla stock hasn’t done as well since it was bought, even though the company has benefited well from BTC’s appreciation.
On the day the Tesla Bitcoin announcement went viral, shares of TSLA were swapped for $ 863 per unit. Today TSLA is down -30.82% and traded hands for $ 597 per share the day before the stock market opens on Monday. Former CEO of Aegon Asset Management, Gary Black, spoke on Twitter about Tesla’s Bitcoin holdings three days ago and said shareholders would likely be happy if Elon Musk’s company sold the BTC.
“Imagine the positive dynamic [Tesla] would make it, ”tweeted Black. “When they announced the sale of theirs [bitcoin] Position and authorized a [Tesla] Share buyback takes place. Very unlikely, but shareholders would be very supportive, ”he added.
However, some people disagreed with what Black said, and one person said he did not want them to buy back shares. “I want you to invest in growth and make another billion in your BTC position,” replied the person Black. The former CEO of Aegon Asset Management disagreed and said that “makes absolutely no sense”.
“If you asked 100 institutional [Tesla] Shareholders would prefer them [Tesla] Invest $ 1.5 billion of excess cash in BTC or $ 1.5 billion of excess cash in BTC [Tesla] Stock, 95/100 would choose [Tesla] Warehouse, ”Black insisted.
Either way, it’s excess money. But you’d get way more of the $ 8 million active managers you need to buy for the S&P 500 [Tesla], if [Tesla] had a share buyback program instead of buying [bitcoin] with excess cash.
Bitcoin-Buying Microstrategy Shares Fall More than 50% Last Month
In the meantime, the company Microstrategy has been buying Bitcoin on a regular basis for a few months and has also benefited from this decision.
On March 5, 2021, Microstrategy announced it had acquired an additional $ 10 million worth of BTC and currently holds 91,064 Bitcoin on the company’s balance sheet. However, for the past 30 days, Microstrategy stocks (NASDAQ: MSTR) have not done well at all, down -51.25% since February 9, 2021.
On that day in February, MSTR traded for $ 1,272 and today’s statistics show the shares traded for $ 620 per share before the market closed on Friday.
What do you think of the criticism and concerns from people who say these companies should sell their Bitcoin to please shareholders? Let us know what you think on this matter in the comments section below.
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