Tesla: The El Salvador Of The Stock Market?

Key Takeaways:

• El Salvador has doubled down on Bitcoin. 
• Elon Musk hasn’t. At least not at Tesla. 
• Should you do like Elon or El Salvador? 
• Or how about Microstrategy? They’ll really blow your mind. 

In May, The Juice told you how much money the country of El Salvador had lost – on-paper – on its Bitcoin (BTC) investment. Approximately $40 million. 

Fast forward to late July and we have an update, courtesy of an awesome website that tracks El Salvador’s Bitcoin purchases. It’s called the Nayib Bukele portfolio tracker. Named after the nation’s President and Bitcoin enthusiast. 

Depending on your perspective, Bukele is either recklessly insane or an inspiring genius. Because that last green dot – from July 1st – shows he’s doubling down. 

El Salvador purchased 80 more Bitcoin at the beginning of the month, bringing its total to 2,381 Bitcoin. 

On that most recent trade, El Salvador is actually up roughly 20%. However, its entire Bitcoin portfolio has shedded – on paper – around half of its value. 

Mind-blowing number alert: El Salvador is sitting on roughly $53 million in Bitcoin losses. 

What Do Elon Musk And Nayib Bukele Have In Common?

Not much. For starters, Bukele only has one kid. And Elon isn’t doubling down on Bitcoin. At least not at Tesla. 

When it reported earnings last week, Tesla told us it sold 75% of its stake in Bitcoin. According to an analyst at Barclays, the move will cost Elon Musk and company $460 million. 

That’s pretty mind-blowing. 

On the positive and equally as mind-blowing side: 

• Tesla’s operating margin of 14.6% is among the best in the auto industry. 
• Tesla’s revenue increased 42% year-over-year to $16.9 billion. 
• Tesla delivered 27% more cars in Q2/2022 than it did in Q2/2021. 
• Tesla now has 3,971 Superchargers scattered around the world, up 34% year-over-year. 
• Even with the apparent Bitcoin loss, Tesla enhanced its cash position by $902 million in Q2. Bringing it to $18.9 billion, of which $936 million comes from the Bitcoin divestiture.  

When you compare negative to positive mind-blowing numbers from Tesla, The Juice thinks Elon deserves a pass.

Plus, neither El Salvador or Elon ain’t got nothing (pardon our slang) on Microstrategy (MSTR) CEO Michael Saylor. 

• Microstrategy owns more than 129,000 Bitcoins. More than any other public company. 
• With Bitcoin trading just shy of $23,000, as of this writing, Microstrategy’s Bitcoin portfolio is worth $2.94 billion. That’s down around 51% from its value at the end of Q1. 

In terms of the companies’ stocks, Elon wins again! 

Source: Google Finance 

The Bottom Line: As to the more important question of what you should do with Bitcoin, some food for thought. 

Investment firm BTIG has a buy rating on Microstrategy. It thinks the stock will hit $950 by the end of 2024, on the back of Bitcoin rallying to $95,000. 

If this were to happen, Microstrategy’s present Bitcoin position would be worth $12,255,000,000. That’s $12.255 billion. Obviously, this doesn’t include any future buys. 

So Microstrategy and BTIG are super bullish on Bitcoin. More so than El Salvador. And seemingly way more so than Elon Musk. 

Here’s a novel idea: moderation. 

Meet these fine entities in the middle. 

If you’re bullish Bitcoin, maybe think of the number you’re most comfortable investing when you feel the time is right. Take half of that number and buy some Bitcoin. Keep the other half on the sideline and part with it only if you remain comfortable in your conviction and Bitcoin’s trajectory.