Former Goldman Sachs executive urges Tesla to sell Bitcoin to rescue its stock

Former Goldman Sachs chief investment officer Gary Black said that the electric-car maker Tesla could halt the decline in its shares by selling digital gold.

Imagine the positive momentum $tsla would create if they announced the sale of their #btc position, and authorized a $tsla stock buyback instead. Highly unlikely, but shareholders would be very supportive.

— Gary Black (@garyblack00) March 4, 2021

“Imagine the positive momentum Tesla would create if it announced the sale of its bitcoins and approved a stock buyback. Highly unlikely, but shareholders would support it,” noted Black.

On February 8, the company Tesla said that invested $1.5 bn in Bitcoin. In less than a month, the EV maker’s shares fell 28%.

Graph of Tesla stock decline after disclosure of Bitcoin investment. Data: Yahoo Finance.

Former Goldman Sachs executive is confident that Tesla should use excess cash to buy back its own shares, rather than digital assets.

Over the past month, the first publicly Bitcoin-investing company MicroStrategy’s stock has also fallen. Since February 9, shares have fallen 50%.

Graph of MicroStrategy stock decline. Data: Yahoo Finance.

According to Bitcoin Treasuries, at the time of writing MicroStrategy owns 90,859 BTC worth $4.3 billion, bought for $2.18 billion. Tesla owns 48,000 BTC worth $2.58 billion, according to the service.

Data: Bitcoin Treasuries.

On February 8, after the investment, Bitcoin price rose by more than $5,000 within hours and hit a new all-time high above $44,000.

On February 20, the Bitcoin price broke through the $57,000 level, after which it began to fall. At the time of writing, the coin was trading at around $47,500.

Earlier, former Goldman Sachs investment chief Gary Black closed a long position in Tesla shares amid the carmaker’s Bitcoin investment.

According to Wedbush Securities analysts, Tesla’s unrealised profit from its $1.5 billion investment in Bitcoin was higher than from selling EVs in 2020. The company also said that Tesla’s share price is tied to the Bitcoin price.

On February 24 MicroStrategy invested more than $1 billion in digital gold. On March 1 the company bought another 328 BTC for $15 million.

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