Tesla (NASDAQ:TSLA) stock is up today after the electric vehicle (EV) leader met earnings estimates for the second quarter. However, the company’s Q2 report may also say something interesting about its relationship with Dogecoin (DOGE-USD).
For weeks, critics had speculated that multiple factory shutdowns and supply-chain constraints would negatively affect the company’s bottom line. Instead, Tesla surpassed Wall Street estimates for both revenue and earnings per share (EPS). However, it also reported something unexpected; a massive influx of cash from offloading its Bitcoin (BTC-USD). At the same time, Tesla made no move to sell any of its DOGE.
Let’s take a look at what this means for the meme coin Elon Musk made famous.
Is Tesla Endorsing Dogecoin?
Tesla CEO Elon Musk has been a vocal supporter of crypto for a long time, especially Dogecoin. In fact, by backing the meme coin, Musk earned the nickname “The Dogefather.” Despite offloading 75% of Tesla’s BTC holdings, Musk also made it clear that he’s open to buying more Bitcoin in the future:
“This should not be taken as some verdict on Bitcoin. It’s just that we were concerned about overall liquidity for the company, given COVID shutdowns in China. And we have not sold any of our Dogecoin.”
The decision to sell Bitcoin may have been unexpected, but it makes sense for Tesla. It has been a difficult season for crypto markets following the recent crash. Some experts had cited the recent crash as another potential negative catalyst for TSLA stock, issuing bearish predictions as a result. But as Musk noted, the company based their decision to sell on concerns regarding the company, not the crypto.
Meanwhile, it’s difficult to ignore the fact that Tesla held onto its Dogecoin. Both BTC and DOGE have dipped considerably over the past six months, but they’ve spent the past week rising fairly steadily. Upon selling its Bitcoin, Telsa netted a tidy profit of $936 million, helping soothe some concerns.
That said, we still don’t know how much Dogecoin Tesla owns. TechCrunch reports that Tesla “disclosed that it currently owns $218 million worth of digital assets after selling $963 million worth of Bitcoin. The bulk of that $218 million is likely its remaining Bitcoin.”
It’s possible that Tesla’s DOGE holdings are not large enough to have made a difference if sold. However, it would be in keeping with Musk’s behavior to stand by the pupcoin, too. The fact he carefully stressed that Tesla did not sell Dogecoin suggests as much.
What This Means for DOGE
Since Musk’s attempts to acquire Twitter (NYSE:TWTR) fell apart, the future of Dogecoin has been questionable. Experts had speculated that a takeover of the social media platform could push the meme token to new heights. Ever since Musk announced his plans to terminate the deal, DOGE has been left without any major growth catalysts.
Given the fact that Tesla did not sell its Dogecoin, however, Musk may still believe the crypto has room to grow. Even before today’s news, experts forecast that DOGE would rise again in the coming months.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
