$TSLA: Musk Blurts Out Tesla's Cash Crunch

Elon Musk blurted out Tesla faced a dangerous cash crunch. That’s usually a red flag, so why is the stock up?

July 21, 2022 12:23 PM EDT


As a result of the commotion over the sale, Tesla’s investor relations head, Martin Viecha, felt compelled to push back against even some notable bulls worried about what the $936 million liquidation of the Bitcoin position said about the health of the carmaker’s underlying business.

Had it not gone through with the sale, the company would have suffered a quarterly cash drain of roughly $90 million. Instead it padded its reserves further, which now stand at a towering $18.9 billion.

Musk’s admission over the Bitcoin sale lends credence to bears that argue this immense cash pile Tesla hoards instead of distributing to shareholders should be valued at a considerable discount. They believe much of it is in yuan and cannot easily be moved out of the country in an emergency due to capital controls imposed by the Chinese communist regime.

$TSLA Daily chart’s breakout from earlier in the week is impressively running up that hill today:


$TSLA Weekly chart


$TSLA Monthly chart