BTC maxis rejoice as Musk doesn’t dump more of Tesla’s tokens

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BTC maxis are breathing easier after Elon Musk didn’t dump any more of Tesla’s BTC tokens during the third quarter, which is apparently what passes for celebratory news in maxi-ville these days.

On Wednesday, Tesla (NASDAQ: TSLA) dropped its Q3 report card, which showed the electric vehicle manufacturer generated revenue of nearly $21.5 billion in the three months ending September 30, up 56% year-on-year and a new company record. Changed earnings were up 55% to just under $5 billion, while net income more than doubled to $3.3 billion. Tesla credited a surge in vehicle deliveries that was so great that transportation capacity is “becoming expensive and difficult to secure.”

However, mainstream investors appeared unimpressed with Tesla’s results, as the stock fell by as much as 6% in trading after the close. Analysts had forecast revenue coming in closer to $22 billion.

But for ‘crypto’ fans, the big news was the $218 million in ‘digital assets’ that Tesla held on its balance sheet as of September 30. That’s the exact sum the company reported holding at the end of Q2, reflecting (a) the stasis in BTC’s fiat value over the past three months, and (b) the fact that Tesla apparently neither acquired nor dumped any additional digital assets.

At the end of Q2, Musk broke the hearts of maxis everywhere when he revealed that Tesla had sold 75% of the $1.5 billion worth of BTC the company had revealed it was holding in February 2021. By April of that year, Musk confirmed that Tesla had already sold 10% of its BTC “essentially to prove liquidity of [BTC] as an alternative to holding cash on balance sheet.”

During his Q2 call, Musk had audibly shrugged in noting that “cryptocurrency is a sideshow to the sideshow” and “not something we think about a lot.” He may have something there, as Musk was asked zero questions regarding Tesla’s digital assets during Wednesday’s analyst call.

However, Musk did say that it was “likely that [Tesla] will do some meaningful buyback” of its shares next year, possibly in the $5 billion to $10 billion range. Note that Tesla offered no indication that any of this surplus cash lying about would go towards boosting its digital asset portfolio, despite Musk insisting this summer that Tesla was “certainly open to increasing our [BTC] holdings in future.”

Tesla goes to 11

Whether or not this buyback scheme ever materializes remains to be seen. Musk is notorious for teasing events or products that either never appear or wildly miss their original timelines for delivery. Case in point: Musk said Tesla’s previous goal of surpassing Apple’s current market cap was no longer sufficiently challenging. Musk says he now sees “a potential path for Tesla to be worth more than Apple and [oil and gas giant] Saudi Aramco combined.”

That’s $2.3 trillion (Apple) plus $7.86 trillion (Saudi Aramco) for a combined target of over $10 trillion, while Tesla’s current market cap is under $700 billion and falling. The S&P 500 index is down 22% this year, but Tesla has fallen 37%.

Much of Tesla’s decline is attributed to Musk’s impulsive offer to buy Twitter for $44 billion, a deal he almost immediately tried to extricate himself from, but the courts wouldn’t let him. With the sale looking more and more like a sure thing, investors fear that Musk will have to dump more Tesla shares onto the market to finance his reckless purchase.

Musk said Wednesday that he and the other investors supporting his takeover bid—including $500 million from the scandal-plagued Binance exchange—were “obviously overpaying for it right now.” But Musk still believes—or wants people to believe that he still believes—that “the long-term potential for Twitter (NASDAQ: TWTR) is an order of magnitude greater than its current value.”

Musk’s buyers’ remorse was on full display here, as he sounded notably less enthused discussing Twitter than when he was talking up his car business. He described himself as “not an investor, I am an engineer, a manufacturing person, and a technologist.”

Can’t solve a problem you don’t understand

Musk has teased the possibility of rolling Twitter into an “everything app” called ‘X’ that would reportedly resemble China’s WeChat, spanning not only social media but also payments, shopping, gaming, you name it. Given his mercurial nature and his increasingly out-there views, not everyone is enthused about Musk overseeing all their online activities.

In addition to waffling on his Twitter purchase, Musk has also demonstrated a shallow understanding of blockchain technology. In text messages disclosed during his Twitter court case, Musk told his brother that he had “an idea for a blockchain social media system that does both payments and short messages/links like Twitter. You have to pay a tiny amount to register your message on the chain, which will cut out the vast majority of spam and bots.”

As pointed out on this site, Musk appeared completely unaware that such a beast already exists on the BSV blockchain in the form of Twetch. Musk’s ignorance is perhaps understandable given that much of his blockchain experience has been based on BTC, a protocol that had its capabilities neutered by the BTC Core developers in order to force users onto proprietary sidechains. BSV, which remains true to the original Bitcoin protocol established by Satoshi Nakamoto (aka Dr. Craig Wright), retains these capabilities and then some.

Doubling down on his ‘mercurial’ rep, Musk waited all of 10 days after his original ‘Blockchain Twitter’ pitch to take the polar opposite stance, texting: “Blockchain Twitter isn’t possible. The bandwidth and latency requirements cannot be supported by a peer-to-peer network, unless those ‘peers’ are absolutely gigantic, thus defeating the purpose of a decentralized network.”

For a self-professed technologist, Musk doesn’t appear to have a firm grasp on the concept of ‘decentralized,’ at least, not in how it applies to blockchain technology. Let’s hope someone schools him ASAP or Musk’s ‘everything app’ will turn out to be a whole lotta nothing.

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