Good morning and welcome to the IC’s live blog, where our writers round up the biggest business stories of the day and overnight news from the US.
“Tesla has suspended vehicle purchases using bitcoin”.
These were the words of high-profile chief executive and self-anointed ‘technoking’ Elon Musk last night, as he told the Twittersphere that his company’s decision was rooted in environmental concerns.
The value of bitcoin tumbled more than 10 per cent in response. Shares in Tesla also dipped and were down 2 per cent in pre-market trading this morning.
As an electric vehicle manufacturer, questions have been raised about Tesla’s (US:TSLA) commitment to environmental, social and governance (ESG) issues in light of its decision to start accepting bitcoin in March.
Tesla is worried about “rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”, Musk explained yesterday. Mining bitcoin uses an enormous amount of computing power.
“Cryptocurrency is a good idea on many levels”, Musk said, which has a “promising future” – but this “cannot come at a great cost to the environment”.
At the time of opening the IC’s live blog, Musk’s tweet had already garnered more than 350,000 ‘likes’.
Turning to the UK market, shares in leather goods and silk scarf maker Burberry (BRBY) tumbled 8 per cent in early trading, even as the group reinstated its dividend at 2019 levels. Reflecting the blow dealt by coronavirus, revenues slipped more than a tenth to £2.3bn in the year to March. Adjusted profits dropped 9 per cent to £396m.
The pandemic has accelerated a shift towards online retail for many luxury goods companies, along with a spate of M&A activity in the luxury e-commerce space.
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