As I wrote recently, Bitcoin fans face a hurdle in justifying its soaring price: The lead cryptocurrency so far offers practically no practical uses.
On the Q1 earnings call, Kirkhorn lauded the gambit as “a good decision,” noting that Bitcoin’s “a good place to place some of our cash that’s not being used…and get some return on that.” Tesla has feasted on its investment so far, gaining $1 billion in just three months from selling coins at a big profit and via the strong appreciation of the stash still on its balance sheet.
But is investing corporate cash in Bitcoin really a movement in the making? I asked Jerry Klein, managing director of Treasury Partners, a firm that manages fixed-income portfolios for dozens of companies.
Clients, almost without exception, says Klein, place their liquid funds in portfolios that comprise three types of investments: government bonds, including munis; money-market funds; and investment-grade corporates.
This approach applies not just to companies that use all their cash to fund inventories and accounts receivable, but those that prefer holding a large cushion.
“They don’t seek to invest that extra cash in a way that would risk principal for a higher return.” Klein adds that many companies keep a big balance to fund R&D projects or merger opportunities that may arise unexpectedly, or “just for a rainy day.” Large cash holdings, conservatively invested, provide protection from another pandemic, a sudden drop in sales, or another unforeseen storm.
“In 2016, when the regulations changed and prime money-market funds were forced to convert from fixed to floating net asset value, assets in prime funds decreased by approximately 90%.
Prior to the financial crisis, a few companies risked their cash chasing big yields, chiefly by purchasing such structured products as auction-rate notes and mortgage-backed securities.
Warren Buffett on Saturday defended Berkshire Hathaway Inc.’s decision last year to sell its stake in major airlines in May 2020 as the industry reeled from the pandemic and share prices were near what would prove to be their bottom..
Electric vehicle maker Tesla Inc, facing scrutiny in China over safety and customer service complaints, is boosting its engagement with mainland regulators and beefing up its government relations team, industry sources said.
In its Q1 report this year, the company said “buildout of Gigafactory Berlin is continuing to move forward, with production and deliveries remaining on track for late 2021.” Tesla has been public in its complaints over the permit approval process in Germany.
The six people, who included a man in his 20s and another man in his 30s, helped on the relay in the southern prefecture of Kagoshima on April 27, Tokyo 2020 said in a statement late on Saturday.
Cryptocurrency ether broke past $3,000 on Monday to set a new record high in a dazzling rally that has outshone the bigger bitcoin, with investors betting that ether will be of ever greater use in a decentralised future financial system.
The new valuation for the Jack Ma-founded company, which has been forced to restructure following scrutiny from Beijing, was $144 billion as at the end of February, based on regulatory filings cited by the WSJ.
We’re seeing very substantial inflation.” Rapidly rising prices are viewed with concern by investors as they can eat into returns, drive up interest rates and potentially cause long-term damage to the economy and living standards by eroding the value of workers’ wages.
nonprofit Digital Dollar Project said on Monday it will launch five pilot programs over the next 12 months to test the potential uses of a U.S.
The Institute for Supply Management said on Monday its index of national factory activity fell to a reading of 60.7 last month after surging to 64.7 in March, which was the highest level since December 1983.
“We will not be anywhere near as focused on buybacks going forward as we have in the past,” Intel Chief Executive Officer Pat Gelsinger said in an interview on the CBS news magazine “60 Minutes” to air on Sunday night.