Tesla CEO Elon Musk threw some shade at Rivian and Lucid Motors, telling Tesla Owners of Silicon Valley at Gigafactory Texas that the rival electric vehicles (EV) companies will go bankrupt “unless something changes significantly.”

                By                    Yaёl Bizouati-Kennedy

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His comments come at a time when shares of Tesla have been struggling — notably since the announcement of his $44 billion Twitter deal. In addition, some analysts are also noting that Bitcoin’s sharp decline might spell trouble for the EV company, as it owns a lot of it.

Musk said of his EV rivals on a video posted to Twitter, “The only car companies in the U.S. that haven’t gone bankrupt are Tesla and Ford. Unless something changes significantly with Rivian and Lucid, they will both go bankrupt. I hope they are able to do something, but unless they cut their costs dramatically they are in deep trouble.”

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And now, Tesla might face additional issues due to the amount of Bitcoin the EV company holds. In 2021, Tesla bought $1.5 billion in Bitcoin. Bitcoin’s price is around $21,650 on June 15, down around 69% from its Nov. 10, 2021 all-time-high of $69,044, according to CoinGecko.

As Barron’s notes, the decline means that Tesla will likely have to recognize a significant loss from its Bitcoin holdings in its second-quarter earnings report. When Tesla bought the crypto, it was north of $30,000 according to Barron’s, which adds that after a few gains and losses, Tesla’s carrying value on the roughly 42,000 coins held was about $1.26 billion at the end of the first quarter of 2022.

For the second quarter of 2022, Tesla likely will have a pretax loss of about $360 million based on where Bitcoin is trading today.

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“Investors should see it as a one-time charge and Bitcoin probably won’t make or break second-quarter results. That is a guess though. How investors react to any one-time charge can’t really be known in advance,” according to Barron’s.

Shares of Tesla are down 43% year-to-date, but are up about 3% so far on June 15. As for Rivian, it holds about $17 billion in cash, cash equivalents, and restricted cash as of March 31, 2022.

“For investors, the question is valuation. The company has a market cap of about $28 billion, and there are near-term headwinds that include supply chain challenges and increasing input costs,” Smith said. “So there is already solid execution built into the stock price. But the company has the pieces in place for long-term success if it can navigate the short-term challenges. There’s no guarantee that it will, but for investors wanting exposure to the EV sector with a long-term time horizon, Rivian looks to be a solid option right now.”

Wedbush Securities analyst Dan Ives also has an Outperform rating on the stock, despite some earlier skepticism.

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