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Tesla is now sitting on $2.5 billion of bitcoin

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Elon Musk, CEO of Tesla, stands on the construction site of the Tesla Gigafactory in Grünheide near Berlin, September 3, 2020.

Patrick Pleul | picture alliance | Getty Images

Tesla is sitting on roughly $2.5 billion worth of bitcoin, according to a securities filing, giving the automaker a significant gain on paper just a few months after investing.

The automaker said its investment in the volatile cryptocurrency was worth $2.48 billion at the end of March. The company announced earlier this year that it had purchased $1.5 billion worth of bitcoin and planned to accept it as payment for vehicles.

Tesla said on Monday that it registered a net gain of $101 million from sales of bitcoin during the quarter, helping to boost its net profits to a record high in the first quarter. Tesla does not account for bitcoin as a mark-to-market asset, meaning it only recognizes an earnings benefit if it sells to lock in the gains.

Bitcoin was trading near $59,000 on the final day of March, slightly above where it was trading on Wednesday morning. The crypto asset has swung widely in the intervening weeks, trading well above $60,000 before falling sharply to below $50,000.

Shares of Tesla were down slightly in premarket trading on Wednesday. The stock, which has been one of the best performers in recent years, has dropped more than 15% over the past three months.

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More big Vision Fund returns expected

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Off the heels of a blowout quarterly report, SoftBank CEO Masayoshi Son told CNBC’s Andrew Ross Sorkin that he expects to see even more exits from companies in the Vision Fund’s portfolio.

“I want to create an ecosystem… where we would have multiple companies going for IPOs,” Masa Son said in the interview, which was recorded Wednesday night. He said 14 of SoftBank’s Vision Fund companies had an IPO or other exit over the last 12 months, up from eight exits the year before.

SoftBank on Wednesday reported $45.88 billion in net profit for the last quarter, largely thanks to the IPO of one of the crown jewels in its Vision Fund portfolio, the South Korean e-commerce company Coupang.

SoftBank also benefitted from the rising stock price of Uber, which it had invested billions in before the ride-haling company had its IPO. DoorDash, another Vision Fund portfolio company, also had a successful IPO last year.

SoftBank’s Vision Fund, a $100 billion fund for placing big bets on technology start-ups, has investments in companies like the online grocer GoPuff, self-driving car company Aurora and fitness tech company Whoop. SoftBank is invested in about 200 companies through its two Vision Funds.

The huge quarter comes after a remarkable slump for companies SoftBank made huge bets on, especially WeWork. WeWork botched its high-profile IPO in 2019, nuking billions in value from the buzzy start-up and ultimately leading to the ouster of its co-founder and CEO, Adam Neumann.

Still, Masa Son seemed optimistic about WeWork when asked if he had any regrets about his investments.

“WeWork is turning around now,” Masa Son said, adding that he expects the company to be profitable “sometime in the next several quarters.”

But beyond the WeWork debacle, Masa Son said he has bigger regrets for the investments he passed on, such as Airbnb and software company Snowflake. He said he didn’t invest in Airbnb because he thought it was too expensive at the time. Shares of Airbnb are down about 4% year to date, but it still maintains an $85 billion market cap.

“I saw they’re a pretty good company, a great business model, great talent an so on,” Masa Son said of Airbnb. “I thought the price was a little too expensive. We were discussing to invest, but I was not smart enough to accept the price tag that they had a couple of years ago.”

Masa Son said most investments he missed happened because of the price to get in on an investment. He also said that even though the Vision Fund tends to invest in high-growth, money-losing companies, he still looks for a positive outcome in the long term.

“So you have to have a pretty long view… and you have to imagine and so on,” Masa Son said. “Sometimes you may imagine the result would be a bad result, as we have experienced, but sometimes you have to be brave enough to imagine, you know, more on the positive side.”

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Uber rival Ola offers London drivers incentives to go electric

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Ola cab drivers talk with each other as they wait for passengers by a roadside in Amritsar.

NARINDER NANU | AFP | Getty Images

LONDON — Indian ride-hailing firm Ola said Thursday it would offer its London drivers incentives to switch to electric vehicles, turning on the charm as it seeks to convince city regulators it’s fit to operate in the city.

From Thursday, Ola will waive its commission fee until Aug. 13 for drivers that own an electric model. Ola users in London will be able to request a ride from a new “Ola EV” category, which allows only drivers with electric vehicles to accept trips.

The SoftBank-backed start-up launched its app in the U.K. capital in February last year, hoping to unseat Uber as market leader. But it was subsequently stripped of its license just eight months later, with local transport authorities concerned Ola was not “fit and proper” to hold one.

Ola appealed the decision by Transport for London not to renew its license. That means it can still operate in the city. A similar thing has happened to Uber, twice, but the San Francisco-based firm managed to regain its license after a court battle with TfL.

In Ola’s case, TfL found the company had committed “historic breaches” that compromised the safety of the public. It said unlicensed drivers were able to undertake more than 1,000 passenger trips using Ola, and that the company failed to notify regulators immediately when these breaches were first identified.

“We continue to work with TfL to address the issues raised in an open and transparent manner,” Ola said in a statement. “At Ola, our core principle is to work closely, collaboratively and transparently with regulators such as TfL.”

“As Ola stated at the time of TfL’s decision, we are appealing the decision and in doing so, our riders and drivers can rest assured that we continue to operate as normal, providing safe and reliable mobility for London.”

Ola claims to have over 25,000 drivers in London, 700 of which are eligible for Ola EV. Following the launch of Ola EV, the company says it will look to extend its offers through partnerships with other businesses to encourage more drivers to make the switch from polluting vehicles.

In March, Uber reclassified all 70,000 of its U.K. drivers as workers after the country’s Supreme Court ruled that a group of the company’s drivers should be treated as workers, not independent contractors. That meant that Uber had to give its U.K. drivers a minimum wage, holiday pay and pension plans.

Other ride-hailing apps, including Ola, Bolt and Free Now, say they are reviewing the Supreme Court ruling to see if it affects their business.

Ola has been pushing deeper into electric vehicles lately. The company’s Ola Electric unit, which makes electric scooters and charging facilities, has raised over $300 million from investors to date, according to Crunchbase. The firm recently hired Jaguar Land Rover veteran Wayne Burgess as its head of vehicle design.

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MSCI to swap Alibaba’s New York shares with Hong Kong in stock indexes

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Signage for Alibaba Group Holding Ltd. covers the front facade of the New York Stock Exchange November 11, 2015.

Brendan McDermid | Reuters

BEIJING — Stock index giant MSCI said Wednesday it is removing the U.S.-listed shares of Alibaba from its global indexes, and replacing them with Alibaba’s Hong Kong-traded shares.

The move, set to take effect after the close on May 27, could see trillions of U.S. dollars tracking those indexes leave the U.S. Trading volume for Alibaba’s Hong Kong shares, which is a fraction of those listed in the New York, could also surge.

The affected indexes include the benchmark MSCI Emerging Markets Index that many institutional investors use to determine how they should invest outside of the U.S., Europe and Japan.

A representative for Alibaba did not immediately respond to a request for comment.

When the tech giant founded by Chinese billionaire Jack Ma listed in New York in 2014, it marked the biggest initial public offering at that time.

Chinese start-ups have since rushed to list in the U.S. despite political tensions. But as concerns about potential de-listing of Chinese stocks from U.S. exchanges grow, major companies like Alibaba and JD.com have launched dual listings in Hong Kong in the last two years.

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