Saylor’s report MicroStrategy Bitcoin loss of $143.4 Million

Key Points:

• MicroStrategy Bitcoin Loss Widens to $143.4 Million, or $10.09 a share, in Q3 2023, due to a $33.6 million impairment loss on its Bitcoin holdings.
• MicroStrategy’s revenue from the software business rose about 3% to $129.5 million in Q3 2023, above analyst expectations.
• MicroStrategy CFO Andrew Kang said the company plans to purchase more Bitcoin.

MicroStrategy Inc., the top enterprise software company and the largest publicly traded holder of Bitcoin, announced MicroStrategy Bitcoin loss in the third quarter resulting from a write-down caused by the decrease in the value of the cryptocurrency.

MicroStrategy Bitcoin Loss Widens to $143.4 Million

The company, headquartered in Tysons Corner, Virginia, reported MicroStrategy Bitcoin loss widened to $143.4 million ($10.09 per share), compared to $27 million ($2.39 per share) in the same period last year. Revenue from the software business increased by approximately 3% to $129.5 million, surpassing the analyst forecast of $125.8 million. MicroStrategy, which has been purchasing Bitcoin as a hedge against inflation since 2020, faced write-downs due to the volatile nature of the cryptocurrency. Bitcoin has increased by 30% following an 11% decline in the previous three months.

Co-founder Michael Saylor has transformed the struggling software company into a Bitcoin proxy for investors, accumulating over $5.5 billion worth of the cryptocurrency. Saylor stepped down as CEO last year to focus on the Bitcoin aspect of the company’s strategy. The company recorded a $33.6 million impairment loss for the quarter, bringing the total to over $2.2 billion. Bloomberg calculates that the company has written off nearly half of its Bitcoin purchases. As of October 31, MicroStrategy held over 158,000 Bitcoin at a total cost of $4.69 billion.

CFO Says Company Will Buy More Despite MicroStrategy Bitcoin Loss

During a post-earnings conference call, Chief Financial Officer Andrew Kang revealed the company’s plans to acquire more Bitcoin. Investors and analysts are now considering the future of MicroStrategy’s shares, especially with the potential approval of Bitcoin ETFs by the US Securities and Exchange Commission. Since mid-2020, MicroStrategy shares have more than tripled in value as Bitcoin has surged, while the Standard & Poor’s 500 Index gained about 40% during the same period.

In the conference call, Saylor highlighted the advantages of investing in MicroStrategy stock compared to a US spot Bitcoin ETF, mentioning the absence of fees and the potential for Wall Street capital to enter the Bitcoin ecosystem. Since the end of the quarter, the value of MicroStrategy’s Bitcoin holdings has risen by approximately $1.2 billion, roughly equivalent to the company’s market capitalization when it began purchasing cryptocurrencies in 2020. Saylor indicated his plan to sell some of his MicroStrategy shares between January and April of the following year as part of expiring options.

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