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1/ HAPPY #TESLA DAY, #bitcoin! Two things in the announcement caught my eye🧐& are worth pondering.🤔
* the $1.5bn #bitcoin purchase was 7.7% of @Tesla's $19.4bn of cash. Why only 7.7%?
* Tesla plans to accept bitcoin as payment but "may or may not liquidate upon receipt." Why?
* the $1.5bn #bitcoin purchase was 7.7% of @Tesla's $19.4bn of cash. Why only 7.7%?
* Tesla plans to accept bitcoin as payment but "may or may not liquidate upon receipt." Why?
2/ Why only 7.7% of cash? Well, @Tesla confirmed it's using indefinite intangible accounting, which is UGLY treatment (lower of cost or market+risk of impairment charges). We bitcoiners must work to get bitcoin acctg fixed. It's prob why Square only put 2% of its cash into #BTC.
3/ What gives? "Impairment charge"=☠️. Cos hate them bc they cause sudden hits to earnings. I'd guess Tesla & Square ran scenario analyses to see how big an impairment charge they cld tolerate in a #bitcoin bear mkt, & sized their investment based partly on that (+other factors).
