April 2021
Case
HBS Case Collection

Accounting for Bitcoin at Tesla

Format:Print
| Language:English
| Pages:17

Abstract

In February of 2021, Tesla revealed that it had purchased $1.5 billion of Bitcoin, totaling 7.5% of the company's cash. This announcement came after a series of cryptocurrency-related tweets from Elon Musk, the company's CEO, and a surge in cryptocurrency values. The announcement was met with mixed reactions by stock investors and market participants. This case centers around the accounting treatment of Bitcoin at Tesla: what does the company's choice of accounting treatment say about Bitcoin as an asset, and what are its implications for Tesla's profitability measures under the Generally Accepted Accounting Principles? The case also raises questions about whether investing in Bitcoin is consistent with the company's strategy, and whether Musks' public communications constitute a form of market manipulation.