Why Isn’t Every CFO Parking Some Treasury Funds in Crypto?
#Katafin 2021 Week 19 Ending 5/7/21
Tesla made $101 million in its latest quarter from proceeds from its investment in Bitcoin. Ever since the announcement, financial analysts and media people have been debating the move and its rather significant impact on Tesla’s quarterly earnings. Some have highly criticized the move and point to it proving that Tesla’s business is shaky at best. My take is that businesses too often focus too narrowly on the direct business that they are in instead of thinking about the component parts of the activity much less thinking about the complete rethinking of what shoppers are actually doing and what they want.
A great corollary is Amazon that makes most of its gross margins from its AWS and Media business. If Amazon was only on the ecommerce business, it would lose money like the majority of ecommerce players and continually struggle to fund its ongoing operations. The car business isn’t about the shiny rolling things, it’s about transportation and increasingly technology, entertainment and financing. All kinds of global businesses regularly holds various currencies and other kinds of investments to hedge against all kinds of things and to take advantage of spreads between currencies they are receiving and currencies in which they need to pay for things. Elon was just smart enough to be…
