Tesla $1.5bn bitcoin purchase triggers new record high – as it happened
Rolling live coverage of business, economics and financial markets as US electric carmaker promises to accept payments in cryptocurrency
- Bitcoin price surges to $44,868, a new record
- World shares hit new record amid $1.9 trillion US stimulus hopes
- Oil above $60 per barrel for first time since February 2020
- Boohoo buys Sir Philip Green's brands, but 2,450 jobs at risk
3.05pm GMT
Elon Musk knows how to create a stir: the disclosure on Monday that his company, Tesla, has bought bitcoin worth $1.5bn (1.1bn) pushed the price of the cryptocurrency up to a new record high of $44,868.98.
Tesla shares gained 2.3% in early trading in Monday - raising its value by more than $18bn - more than offsetting the price of the bitcoin purchase.
Related: Tesla buys $1.5bn in bitcoin, pushing price to new high
$TSLA adds $1.5 billion #Bitcoin to its balance sheet. Buckle up, we're passing the Moon and heading to Mars!
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2.34pm GMT
The S&P 500, Dow Jones industrial average and Nasdaq have all hit new record highs on Monday, reflecting the general risk-on attitude as investors look ahead to the US stimulus bill.
Here are the snaps:
2.27pm GMT
You can forget sometimes that Tesla was facing serious cash flow problems less than two years ago, but it managed to walk the tight rope through production problems.
During 2020 it was gripped by an investor mania that has pushed its value to more than $800bn - bigger than the next nine carmakers combined (when we ran the numbers last week). That share price increase allowed it to raise billions of dollars by issuing new stock to be snapped up by retail investors.
As a bitcoin and crypto investor, I'm happy obviously but - as in 2017 - at some point I will have to get out as another almighty crash begins.
1.52pm GMT
Tesla's bitcoin purchase has sent the cryptocurrency world into ecstasies.
I just noticed you can buy a Tesla with less than 1 bitcoin.
#Bitcoin $43,899.77, +13.85% in 24 hours - Elon Musk and $TSLA have printed money out of thin air ;)
Perspective on Tesla buying $1.5 billion in #Bitcoin
~0.18% of its current market cap
~7.7% of its year-end cash
$1.5 billion sounds like a lot of money, but it's a small bet$TSLA market cap currently up ~$20 billion pre-market on the news
1.32pm GMT
On it goes: bitcoin is now up 17% through the $44,000 mark and hitting $44,868.98.
That is a new record. Tesla's purchase is generating fortunes across the world.
1.30pm GMT
The Tesla bitcoin purchase really raises a whole host of questions, but here are two of the most pressing: will Tesla's investors appreciate their stock being exposed to the wild movement of bitcoin? Can Elon Musk legally tweet bitcoin memes when pumping the price will increase the value of the company he runs?
Musk recently replaced his Twitter biography with #bitcoin", but had not previously revealed any holdings.
It raises a real question about possible market manipulation. Musk's tweeting record is chequered to say the least and he has had his knuckles rapped by the SEC in the past. The filing simply says that the investment policy was updated in January 2021 and thereafter' the company invested an aggregate $1.5bn in Bitcoin. Timing would appear critical.
Tesla also says it may acquire and hold other digital assets. The move will also raise questions for fund managers who may not want to invest in a company with this kind of risk on its balance sheet - we know bitcoin is very volatile - this is normal FX risk x100. Tesla is now starting to take on big FX risk - this may not worry a lot of investors, but some conservative types might be concerned.
1.21pm GMT
The price of bitcoin has gained 13% to reach a new record high of $43,774 after Tesla's disclosure that it has bought $1.5bn of the cryptocurrency.
With a holding of that size the disclosure alone will already have made Tesla a large paper profit - although the carmaker did not disclose how much it paid for the cryptocurrency.
1.06pm GMT
Tesla, the US electric carmaker run by the multibillionaire Elon Musk, has revealed that it has bought bitcoin worth $1.5bn.
We expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.
The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future. If we hold digital assets and their values decrease relative to our purchase prices, our financial condition may be harmed.
12.26pm GMT
Mike Ashley's Frasers Group has offloaded its 25% stake in French Connection after the fashion retailer's share price shot up on hopes of a bid.
11.47am GMT
Worldwide share prices have hit a new record high amid hopes that the expected US stimulus package will lift global demand.
MSCI's all-country world index hit the new record mark after strong gains in Japan and China, followed by stock markets in Europe.
There are clearly risks, such as a resurgent virus and overly bullish sentiment but household finances are in good shape - monetary and fiscal injections have left households with money to spend on eating out, travel and holidays once restrictions are removed. Government spending is expected to remain at high levels and it is being bought up by central banks.
All signs indicate that low interest rates will continue and we are likely to see a strong recovery in corporate earnings in 2021 and further into 2022, this will likely entice investors into risk assets.
11.35am GMT
The number of shoppers visiting UK retailers rose by 7% last week compared to the week before, the third week of rising footfall in a row, despite the continuing national lockdown.
The rising footfall may indicate lockdown fatigue", according to Springboard, which compiled the data - although it acknowledged that the rollout of coronavirus vaccines may also have contributed to increased consumer confidence.
Whilst large city centres have taken the biggest hit, footfall still rose in marginally regional cities and by double digits in Central London. With shopper activity increasing for the past three weeks despite all but essential stores remaining closed, the results are delivering ever more compelling evidence of escalating lockdown fatigue.
The UK's accelerated vaccination drive could well be driving additional consumer confidence, however, we must remember that it is still only the elderly and vulnerable who have had their vaccinations, and they are typically the least likely to be making trips.
11.23am GMT
There are some interesting moves on London's junior stock exchange: the share prices of Boohoo and Asos, two big fashion retailers, have fallen after the UK government said it might target tax rises at tech companies and retailers who have profited from the pandemic.
Related: Online sales tax aims to 'shift balance' as UK high streets struggle
10.31am GMT
A mid-morning check-in on the FTSE 100: London's benchmark index is ticking along nicely, up 0.7%, or about 48 points, at 6,536 points.
It's the miners and the oil companies who are providing most of the impetus for the index.
10.00am GMT
Apple and Hyundai are no longer in talks about a potential deal to build electric cars, according to a statement from the South Korean carmaker that punctured its share price on Monday.
Shares in Hyundai fell by 6.2% on Monday and Kia, its partner through cross-shareholdings, also lost 15%. Kia had been reported as the likely manufacturer of the Apple cars.
We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided.
We are not having talks with Apple on developing autonomous vehicles.
9.49am GMT
SoftBank made gains of 9.6bn on its investments in technology companies such as taxi app Uber and food delivery company DoorDash during the last three months of 2020, as the surge in valuations in the second half of the year made up for the Japanese conglomerate's previous struggles.
SoftBank Group Corp chief executive Masayoshi Son boasted of delivering golden eggs" on Monday.
Our vision never changed," Son told a news conference in Tokyo after his company announced its latest results. Golden eggs are not produced by chance," he added, returning to a favoured analogy that describes SoftBank as a goose that backs fast-growing companies such as Alibaba that are its golden eggs. [...]
9.19am GMT
Oil prices have bumped a bit higher: Brent crude hit highs of $60.27 per barrel, and futures are now trading at $60.10, a gain of 1.3% today.
West Texas Intermediate is up by 1.2%, at $57.55 per barrel.
9.16am GMT
Another interesting story to note involving BP this morning: the oil company plans to use autonomous vehicles on its refineries this year, after tests with Oxbotica, a startup working on the technology.
9.04am GMT
The Queen's financial interests have been under more scrutiny in the last 24 hours than Buckingham Palace would usually care for.
Related: Revealed: Queen lobbied for change in law to hide her private wealth
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8.30am GMT
There might be hopes of a big stimulus bump coming through from the US, but economists still expect a long road ahead for the global economy. There was a reminder of that earlier from German industry, where production was unchanged in December, after seven months of gains.
It currently looks unlikely that the manufacturing sector will save the German economy from contraction once again. Production expectations have recovered somewhat since November but are still below their summer levels. At the same time, the inventory reduction of the second half of 2020 seems to have come to an end at the turn of the year.
8.11am GMT
Online fashion retailer Boohoo has bought Dorothy Perkins, Wallis and Burton for 25m, completing the break up of Sir Philip Green's Arcadia Group.
8.06am GMT
The FTSE 100 has opened higher on Monday morning: London's blue-chip stocks rose by 0.6%, a gentle 35-point gain, to reach 6,521 points.
It was a similar story across Europe. Germany's Dax index, stuffed full of exporters, gained 0.7%, and France's Cac 40 rose by 0.5%.
7.54am GMT
Good morning, and welcome to our live coverage of business, economics and financial markets.
Demand for oil slumped at the start of the coronavirus outbreak, but it appears to be back, as prices broke through the $60 mark for the first time since the extent of the pandemic became clear.
CHART OF THE DAY: Brent crude has rallied nearly $8 year-to-date - it's the best start of the year (in absolute terms) since the Brent futures was launched more than 30 years.
In % terms, Brent is up ~16%, the best start of the year since 2001 | #OOTT Chart via @TheTerminal pic.twitter.com/WKvLe04KjA