Elon Musk really just can’t help himself, can he?
As the entire world was in flux dealing with a global pandemic, the rogue CEO of Tesla (TSLA) saw shares of his electric-vehicle company explode than 1,100% since its pandemic-lows in March.
But that wasn’t enough for Musk. A couple of weeks ago, Tesla announced it purchased $1.5 billion worth of bitcoin, which gives the company liquidity in the cryptocurrency once it starts accepting it for payments.
And now for better for worse, it appears Tesla and Bitcoin will forever be tied to one another. Which, given the fact that Bitcoin has little to no application as a form of currency, that’s quite the risky horse to hitch your wagon to. In fact, we’re already seeing that play out today. As the price of Bitcoin has dropped more than 15% today, Tesla has followed suit losing as much as 8% this morning,
Wall Street appears to be a bit conflicted as well… even if they don’t know it. Just take a look at what analyst Dan Ives had to say about Tesla’s latest move:
“With Tesla diving into the deep end of the pool on bitcoin, Musk runs the risk that this sideshow can overshadow the fundamental EV (electric vehicle) vision in the near term for investors.”
Ives goes on to say he still believes Bitcoin is a “smart move at the right time for Tesla,” before wrapping up his remarks with his very own counter assessment:
“On the downside it’s playing with firecrackers and risks and volatility are added to the Tesla story.”
Firecrackers and risk, indeed.