Money Stuff: Tesla Sold Some Bitcoins(bloomberg.com)
bloomberg.com
Money Stuff: Tesla Sold Some Bitcoins
https://www.bloomberg.com/opinion/articles/2021-04-28/elon-musk-made-tesla-some-money-on-bitcoin
65 comments
I'm not a lawyer.
> If we look at it from stocks, if Tesla bought a million shares of random X penny stock, and then Elon Musk tweeted that this random penny stock is now amazing. And then once it reached $10 they sold 10% at 1000% percent profit. That's illegal, so why is crypto not?
I'm pretty sure that is legal as long as you disclose that you own it. I think you're allowed to:
1. say: "I own a stock." 2. say: "It's a great stock." 3. (stock price goes up) 4. (sell stock)
And intuitively, this should be legal. If you disclose your position, you should be able to talk about how great it is, as long as you don't lie.
> If we look at it from stocks, if Tesla bought a million shares of random X penny stock, and then Elon Musk tweeted that this random penny stock is now amazing. And then once it reached $10 they sold 10% at 1000% percent profit. That's illegal, so why is crypto not?
I'm pretty sure that is legal as long as you disclose that you own it. I think you're allowed to:
1. say: "I own a stock." 2. say: "It's a great stock." 3. (stock price goes up) 4. (sell stock)
And intuitively, this should be legal. If you disclose your position, you should be able to talk about how great it is, as long as you don't lie.
Huh, you're right I went and double checked the law.
What I said above is completely legal you just need to disclose you own X penny stock.
So random person with a bunch of followers can legit buy a million dollars of a stock, go on twitter spouting about it (even though just the increase of mentions are likely to make it become more noticed and thus gain value) and make a bunch of money.
That's fantastic...
What I said above is completely legal you just need to disclose you own X penny stock.
So random person with a bunch of followers can legit buy a million dollars of a stock, go on twitter spouting about it (even though just the increase of mentions are likely to make it become more noticed and thus gain value) and make a bunch of money.
That's fantastic...
You can also legally do the inverse of this, short a stock, say you are short the stock, and then tell people how much the business sucks so it goes down and you make money.
See: Hindenburg Research, Muddy Waters Research
Isn't this literally just what happened with wallstreetbets
It's buyer beware. Yeah if you own a thing and people will buy it off you at a high price when you tweet buy
then you can make money.
Not just "can", this happens on Twitter, Instagram, Stocktwits etc daily.
Im also not a lawyer..
But I have a huge problem with thinking that Elons tweets about BTC is the primary mover of BTC vs USD.. The dollar value of BTC is basicly a random number generator..
But I have a huge problem with thinking that Elons tweets about BTC is the primary mover of BTC vs USD.. The dollar value of BTC is basicly a random number generator..
There is a massive grey area where trading, advising, hyping and fraud all intersect. The SEC exists for the purpose of making these distinctions, but they don't cover Bitcoin (as far as I know).
Hrm, I'm pretty sure that area is pretty small. If "advising" here means a fiduciary agreement, the laws are pretty cut and dry as far as I know: you have a duty to act in the interest of your client.
The simple answer is that Congress has not yet passed laws that truly define what Cryptocurrencies are in the eyes of the government. To the IRS, it is merely property and is taxed as such. The SEC would like to regulate Bitcoin and Altcoins as securities, but securities law was never designed with these things in mind. That's why the penny-stock pumping example would be regulated, but doing the same thing with an Altcoin is permissible. Eventually, I expect Congress will pass some sort of law on the subject. I hope it's not too restrictive on ordinary citizens who own crypto.
What we're seeing is a wild west and I don't think it will last much longer.
What we're seeing is a wild west and I don't think it will last much longer.
It's illegal to purchase a stock and announce you purchased said stock?
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Yes, there is endless case law and legislation around this type of trick. It's usually considered securities fraud. https://en.wikipedia.org/wiki/Pump_and_dump
Obviously it's not strictly illegal to purchase stock and then say you did, but it doesn't make sense that you would need that clarified.
Obviously it's not strictly illegal to purchase stock and then say you did, but it doesn't make sense that you would need that clarified.
Per your own link, isn't "false or misleading statements" a core component? And if it is, how does this apply to what Tesla did here?
Also, if what Tesla did was illegal then aren't many authors on Bloomberg/SeekingAlpha/ CNBC/etc also just as liable? Seems like what we're discussing is a common occurrence and securities cases are often about people misleading about their own stock/company rather than third party/other tickers (even if they hold shares, or in this case coin).
Also, if what Tesla did was illegal then aren't many authors on Bloomberg/SeekingAlpha/ CNBC/etc also just as liable? Seems like what we're discussing is a common occurrence and securities cases are often about people misleading about their own stock/company rather than third party/other tickers (even if they hold shares, or in this case coin).
If your statements about your holdings are true, it's not a pump and dump. To be fraud there needs to be deception: either you need to lie about what you bought or the price you paid, hide the fact that you sold it or the existence of other instruments you hold related to the security, etc...
Financial transparency isn't illegal by itself.
Financial transparency isn't illegal by itself.
Or making statements that imply you plan to hold to the moon when you have a sell order set at 1.7x current price.
I don't think this is correct. I believe it's only illegal if you make stock recommendations (pump) to others with false or misleading statements.
I believe any public statement made with the intention of moving the price, as opposed to, say, expressing your genuine commitment to a stock's value, is illegal.
Of course, good luck proving it, or telling the difference, in many cases. But if you cyclically go from “Bitcoin is the future” to “nah”, that might just tip it.
Of course, good luck proving it, or telling the difference, in many cases. But if you cyclically go from “Bitcoin is the future” to “nah”, that might just tip it.
> That's illegal, so why is crypto not?
Crypto-fans want a libertarian free-for-all without government regulation or interference. That's what they're getting.
Good luck, guys!
Crypto-fans want a libertarian free-for-all without government regulation or interference. That's what they're getting.
Good luck, guys!
It's Soros's tutorial on market manipulation, old news.
I don't understand why this is controversial.
Tesla wants to diversify it's holding and decides to have x% of it's holdings in form of BTC.
BTC subsequently goes up sigfinicantly. Now, Tesla has y% of it's holding in BTC, with y larger than x.
Tesla now sells ~100M$ of BTC, which ballparks looks about right to bring y closer to x.
This is what many individuals and investors do all the time, it's just rebalancing and it's the smart thing to do.
BTC subsequently goes up sigfinicantly. Now, Tesla has y% of it's holding in BTC, with y larger than x.
Tesla now sells ~100M$ of BTC, which ballparks looks about right to bring y closer to x.
This is what many individuals and investors do all the time, it's just rebalancing and it's the smart thing to do.
Reason behind the 10% sell off according to Elon https://twitter.com/elonmusk/status/1386821144037236737?s=20
> Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
Can someone who understands finance explain what this means in layman’s terms? How is it just saying they sold Bitcoin so they could have cash on hand?
Can someone who understands finance explain what this means in layman’s terms? How is it just saying they sold Bitcoin so they could have cash on hand?
I'm not great at finance but it reads to me as they sold the BTC as proof of concept that the BTC they are holding can be liquidated (turned back into USD) very easily.
Having $XM USD in BTC means nothing if you can't convert it back into USD. This sell (at least according to Elon) was done just to prove to Tesla/Board/etc/whatever that it was fine to hold BTC because they could convert back to USD if needed at any time.
Having $XM USD in BTC means nothing if you can't convert it back into USD. This sell (at least according to Elon) was done just to prove to Tesla/Board/etc/whatever that it was fine to hold BTC because they could convert back to USD if needed at any time.
what if they were wrong? they'd both crash the BTC price for everyone, plus stick themselves close to a billion dollar write down (is Bitcoin 'inventory') or capital loss. I doubt this carefully organized stunt overlooked the importance of ensuring the market pump punchline hit.
that is to say, I don't think tesla had any worries that someone wasn't ready to take the other side of their ask, very likely the round trip was already arranged from the day they agreed to take a billion in BTC onto their balance sheet. if elon can 'prove' the market has liquidity, everyone backing Bitcoin wins big, Tesla included.
that is to say, I don't think tesla had any worries that someone wasn't ready to take the other side of their ask, very likely the round trip was already arranged from the day they agreed to take a billion in BTC onto their balance sheet. if elon can 'prove' the market has liquidity, everyone backing Bitcoin wins big, Tesla included.
According to Elon they sold 10% of their Bitcoin just to show investors that they could sell Bitcoin if/when they needed cash in the future (so proving that it's not just a dead asset on their balance sheet).
It doesn't really mean anything in layman's terms. It's a transparent lie: If one were to actually take it at face value it would imply that Tesla plowed $1.5B into a "store of value" whose liquidity they were unsure of. It would make no sense. If they wanted to test liquidity they could have quietly bought and sold just the 10% position before YOLOing in the $1.5B.
Tesla simply sold just enough BTC to book enough profit to meet quarterly EPS estimates.
Tesla simply sold just enough BTC to book enough profit to meet quarterly EPS estimates.
If you buy a Bitcoin at $5k and it goes up in value to $50k, you still can't recognize it as a $50k asset. This was a demonstration that the real world value of their holdings is (currently) greater than book value.
This needs more attention. I can’t convince myself Bitcoin is great. At times, I find myself thinking this is the situation where everyone else is jumping off a cliff but I don’t find think that I should. That being said, maybe I should jump :)
I bought bitcoin because I am super curious what will happen when the last(*most of the btc) bitcoin is mined, and I want to own a small amount of it before that point, just to be involved with whatever happens next. I realize that's probably super super weird logic, never the less, here I am.
The last Bitcoin will be mined in ca 120 years. [1]
Maybe better invest in longevity research if you wish to witness this event.
[1] https://bitcoin.stackexchange.com/questions/10486/when-will-...
[1] https://bitcoin.stackexchange.com/questions/10486/when-will-...
Yes, sorry I wasn't very clear, I didn't literally mean the last bitcoin, more.. most of the bitcoin, I was thinking the 2035-2040 timeline (~20years from now).
Most people I know have the same thought process. "It is probably nothing, but I'm going to put a tiny amount of money into it just in case to avoid losing out." When enough people do this, they themselves are giving Bitcoin the value it has.
In case you didn't know, this is almost word for word Satoshi's prediction for the bitcoin success scenario. [1]
[1] https://satoshi.nakamotoinstitute.org/emails/cryptography/17... It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.
[1] https://satoshi.nakamotoinstitute.org/emails/cryptography/17... It might make sense just to get some in case it catches on. If enough people think the same way, that becomes a self fulfilling prophecy.
> I can’t convince myself Bitcoin is great.
If you're open to alternative hypotheses, do read Breedlove's, "Money, Bitcoin, and Time." His writing is an excellent guide in answering the first principles question "what is money?"
https://breedlove22.medium.com/money-bitcoin-and-time-part-2...
If you're open to alternative hypotheses, do read Breedlove's, "Money, Bitcoin, and Time." His writing is an excellent guide in answering the first principles question "what is money?"
https://breedlove22.medium.com/money-bitcoin-and-time-part-2...
In this case you should invest a lot of your time (read the whitepaper, look at the code base, and learn monetary history (Bitcoin Standard book), as it's a very important decision.
Buying/selling just because other people buy/sell is a great way to lose money.
Buying/selling just because other people buy/sell is a great way to lose money.
[deleted]
Watch Michael Saylor on YT. Then remortgage your house to buy as much BTC as you can get your hands on. :)
I love Levine's summary of the whole thing:
> Obviously if you are a transformative electric car company it is better to make your profits by selling transformative electric cars than by moving the price of cryptocurrency with your tweets. Selling the cars is better for the environment, better for the world; it has higher growth potential; it deserves a higher multiple. My point is only that, for Elon Musk right now, moving the price of cryptocurrency with his tweets is really easy and lucrative and, in the short term, sustainable. Among the things he tweets about, it is probably the one that distracts him least from his work, and the one with the highest returns for shareholders. He should do it every quarter.
But you should also read through the story about the deli if you don't want a brick through your window.
> Obviously if you are a transformative electric car company it is better to make your profits by selling transformative electric cars than by moving the price of cryptocurrency with your tweets. Selling the cars is better for the environment, better for the world; it has higher growth potential; it deserves a higher multiple. My point is only that, for Elon Musk right now, moving the price of cryptocurrency with his tweets is really easy and lucrative and, in the short term, sustainable. Among the things he tweets about, it is probably the one that distracts him least from his work, and the one with the highest returns for shareholders. He should do it every quarter.
But you should also read through the story about the deli if you don't want a brick through your window.
February: “As we _currently_ intend to hold these assets long-term”
March: sold hundreds of millions of dollars worth of them
April: “As we _generally_ intend to hold these assets long-term”
(emphasis added)
March: sold hundreds of millions of dollars worth of them
April: “As we _generally_ intend to hold these assets long-term”
(emphasis added)
My hypothesis is that Elon is doing all these Bitcoin stunt to keep the numbers high for Tesla. Tesla is doing great, but other car manufacturers are selling EVs now and they are going to sell even more and more each year. Soon a lot of investors will realize that Tesla is just another car manufacturer among all other ones, and it surely isn't valuable as the sum of the rest.
Honestly this was a no brainer smart thing to do and any large company could have pulled it off not just Musk.
By being one of the first mainstream large companies to buy bitcoin you are sending out a strong positive signal on bitcoin which is likely to move price up.
So just buy it, take your premium and then sell some.
By being one of the first mainstream large companies to buy bitcoin you are sending out a strong positive signal on bitcoin which is likely to move price up.
So just buy it, take your premium and then sell some.
They could do that. But in most public companies, the board would prevent the CEO from spending his time speculating with company money on the price of penny stocks or pound sterling or pork bellies or cocoa futures or whatever other instrument that's unrelated to the company's actual business.
Let's just say Tesla doesn't have the governance of a normal public company.
Let's just say Tesla doesn't have the governance of a normal public company.
Musk has a cult of personality. He's practically a real-life walking talking meme at this point, which seems to be the real driver behind crypto. Could Jeff Bezos or Zuckerberg move bitcoin like that? From a tweet? Doesn't seem likely. Is anyone hyped up about Libra/Diem/whatever the hell it's called now?
Musk tweeted about Signal and they went from 50k downloads a day to 1.3M [1]. An unrelated company, Signal Advance, saw their stock soar. Which... I mean... wow.
[1] https://www.cnet.com/how-to/what-is-signal-everything-you-ne...
Musk tweeted about Signal and they went from 50k downloads a day to 1.3M [1]. An unrelated company, Signal Advance, saw their stock soar. Which... I mean... wow.
[1] https://www.cnet.com/how-to/what-is-signal-everything-you-ne...
You're responding to something I didn't say here. I didn't claim that every company would have the exact same outcome as Musk or that he has no advantage.
Certainly Musk has an advantage here but other companies could have done the same and probably still succeeded. The odds and outcome would not have been exactly the same, which is true of literally everything in life for different people.
Certainly Musk has an advantage here but other companies could have done the same and probably still succeeded. The odds and outcome would not have been exactly the same, which is true of literally everything in life for different people.
> You're responding to something I didn't say here.
...
> other companies could have done the same and probably still succeeded.
Come the fuck on. I'm literally replying to this idea that any other company could do the same.
Your exact words:
> any large company could have pulled it off not just Musk
...
> other companies could have done the same and probably still succeeded.
Come the fuck on. I'm literally replying to this idea that any other company could do the same.
Your exact words:
> any large company could have pulled it off not just Musk
Premise 1: Musk has an advantage in the markets
Premise 2: No company that Musk is not involved with could gain a competitive advantage via the signal they send with a bitcoin purchase.
Premise 1 and premise 2 have no relationship. Stating something about one does not tell you anything about the other. You could logically believe any combination of these premises
So by stating 1, I'm not implying 2. In fact I'm agreeing with 1 and refuting 2. Whereas you seem to be implying that if I believe 1 I have to believe 2. This is not the case.
Premise 2: No company that Musk is not involved with could gain a competitive advantage via the signal they send with a bitcoin purchase.
Premise 1 and premise 2 have no relationship. Stating something about one does not tell you anything about the other. You could logically believe any combination of these premises
So by stating 1, I'm not implying 2. In fact I'm agreeing with 1 and refuting 2. Whereas you seem to be implying that if I believe 1 I have to believe 2. This is not the case.
Because Tesla moves to Ethereum hahah
https://twitter.com/Web3Wallet/status/1180114642301009921
https://twitter.com/Web3Wallet/status/1180114642301009921
Like rats off a sinking ship.
The rats are merely testing the buoyancy of the ship!
This ship appears to be sinking upwards, though.
ROFL!
Straight to the Mars.
Why is John Mcafee being treated differently and is currently in jail? Pumping and dumping altcoins.
He's in jail for tax evasion.
https://www.justice.gov/opa/pr/john-mcafee-indicted-tax-evas...
https://www.justice.gov/opa/pr/john-mcafee-indicted-tax-evas...
> Obviously if you are a transformative electric car company it is better to make your profits by selling transformative electric cars than by moving the price of cryptocurrency with your tweets. Selling the cars is better for the environment, better for the world
It's going to be harder for Tesla to maintain their environmental appeal with Musk out there promoting environment-destroying crypto. I'm surprised this hasn't been pointed out more often.
It's going to be harder for Tesla to maintain their environmental appeal with Musk out there promoting environment-destroying crypto. I'm surprised this hasn't been pointed out more often.
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The limiting factor here is that unlike stocks, it's not safe for a public figure to say bad things about Bitcoin.
It would be like a public figure saying bad things about Nazi Germany while living in Nazi Germany during WW2.
Bitcoin is more like a country than a company... Except it's even more dangerous because all its citizens are anonymous; they operate with total impunity.
They could remove anyone who is an obstacle to the Bitcoin price and nobody would know who did it. Worse than that, any attempt at investigating the crime would be anonymously bribed to a halt.
Not sure if it's like this yet, but seems like a definite possibility.
It would be like a public figure saying bad things about Nazi Germany while living in Nazi Germany during WW2.
Bitcoin is more like a country than a company... Except it's even more dangerous because all its citizens are anonymous; they operate with total impunity.
They could remove anyone who is an obstacle to the Bitcoin price and nobody would know who did it. Worse than that, any attempt at investigating the crime would be anonymously bribed to a halt.
Not sure if it's like this yet, but seems like a definite possibility.
2. Tesla announces that Bitcoin is good now and that it bought some.
3. The price of Bitcoin goes up, because institutional adoption of Bitcoin is good for its price, but also because, by the Elon Markets Hypothesis, anything that Musk buys goes up.
4. Tesla sells some Bitcoin, making a profit.
5. Musk tweets that the price of Bitcoin is too high.
6. Bitcoin prices go down due to the Elon Markets Hypothesis.
7. Go to Step 1.
How is that not illegal?
If we look at it from stocks, if Tesla bought a million shares of random X penny stock, and then Elon Musk tweeted that this random penny stock is now amazing. And then once it reached $10 they sold 10% at 1000% percent profit.
That's illegal, so why is crypto not?
Edit: It's actually legal... so nevermind.