Former Goldman Sachs top executive sells Tesla shares after Bitcoin investment

Former Goldman Sachs chief investment officer Gary Black closed his long position in Tesla shares. He said the electric-car maker’s investment in Bitcoin influenced his decision.

Disclosure: I have exited my $TSLA positions after being long since August 2019. The absence of clear FY’21 delivery guidance, increased odds of a 1Q miss, and a more risky capital allocation policy/higher earnings variability were the primary factors.

— Gary Black (@garyblack00) February 8, 2021

Black had held shares of the Nasdaq-listed company (ticker TSLA) since August 2019. In his words, over the past 18 months these investments have yielded “a lot of money,” and he intends to reopen the long position at a lower price.

$TSLA has always been higher risk, but investing $1.5B in #Bitcoin makes it more risky:
1/ Missed 1Q non-GAAP EPS est by 25% ($.80 vs $1.03 est)
2/ Didn’t give FY’21 deliv guidance, and instead reiterated 50% L/T vol growth goal
3/ 4Q EV share (19.6%) and Auto GM % disappointing

— Gary Black (@garyblack00) February 8, 2021

“Tesla has always been a high-risk investment, but buying $1.5 billion in Bitcoin makes it even riskier,” Black wrote.

The investor sold the shares amid a lack of clear 2021 guidance, higher odds of missing targets in Q1, and a more aggressive capital-allocation approach.

2/ I go back to my criticism of $TSLA earnings calls, which already stood out for their vagueness, lack of detail, and non-discussion of strategic priorities. If $TSLA purchased $1.5B in #bitcoin in January, why not share the logic with shareholders on the earnings call?

— Gary Black (@garyblack00) February 8, 2021

“If Tesla bought $1.5 billion in Bitcoin in January, why not share the logic behind this decision during the investor conference call?” Black asked.

On February 8, Elon Musk’s company announced the investment in Bitcoin. The price of Bitcoin rose to a new all-time high above $44,000. At the time of writing, the asset was trading at around $45,880, according to CoinGecko.

Earlier, former head of the Office of the Comptroller of the Currency (OCC) in the US Treasury, Brian Brooks, described Tesla’s investment in Bitcoin as exciting and frightening.

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