Elon Musk is free to speculate about cryptocurrencies, but it’s unclear what the company gets out of it
Tweeting excitedly about bitcoin is one thing; spending $1.5bn (£1.1bn) of shareholders’ funds on the cryptocurrency is another. If Elon Musk, Tesla’s chief executive and 20% owner, can’t resist the urge to speculate, shouldn’t he be using his own money rather than shareholders’?
Tesla’s audit committee has approved the “investment” as a way to “further diversify and maximise returns on our cash”, which is a heroically breezy way to describe the difference in the profile of risks. Accumulating a large hoard of bitcoins for your treasury operation is not like, say, authorising diversification into Swiss francs. As Tesla’s statement had to concede: “The prices of digital assets have been in the past and may continue to be highly volatile.”