MicroStrategy CEO Reaffirms Long-Term Interest in Bitcoin in Third Quarter Earnings

MicroStrategy CEO Reaffirms Long-Term Interest in Bitcoin in Third Quarter Earnings

Third quarter revenue from business intelligence firm MicroStrategy showed a reduced net loss of $27.1 million for the quarter. But she continues to grow her bitcoin (BTC) wallet despite the bad conditions of the cryptocurrency market.

The largest publicly listed bitcoin holding company confirmed that it still owned 130,000 BTC at the end of Q3 2022. This amount represents 0.62% of the total amount of bitcoins available. The company says it acquired this amount of BTC at a total cost of about $4 billion, which means it bought one BTC for $30,639.

Separately, the company said on Nov. 1 that its impairment charges for the quarter were $727,000, significantly lower than the $917.8 million recorded in the second quarter of 2022. Those charges are significantly lower than the $65 million in impairment charges which he recorded last time. year, thanks in part to the stability of bitcoin prices throughout the last quarter.

Incidentally, the term “impairment charge” is an accounting term used by companies to describe a decrease in the value of assets being held. According to MicroStrategy, the cumulative value of its losses is estimated at about $2 billion as of September 30.

In an earnings conference call, MicroStrategy President and CEO Phong Le reiterated the company’s long-term holding strategy, saying:

“We haven’t sold any bitcoin so far. To reiterate our strategy, we try to acquire and hold bitcoins for the long term. And we have no current plans to engage in bitcoin sales. We have a long-term time horizon and the core business is not affected by short-term bitcoin price fluctuations. »

Michael Saylor, who stepped down as CEO on August 8 but remained with the company as executive chairman, provided an interesting insight into the call. He clarified that since he started his bitcoin strategy on August 11, 2020, the company’s share price has risen by 116% alongside the 72% rise in the price of bitcoin that has occurred in the same period.

In the accompanying earnings report, CFO Andrew Yang referred to the latest announcement regarding the US Financial Accounting Standards Board’s decision to support “fair value accounting” for bitcoin, in these terms:

“If ultimately adopted and implemented, we believe fair value accounting will improve the current, unfavorable intangible accounting treatment applicable to bitcoin holdings. This will promote institutional acceptance of bitcoin as an asset class. »

MicroStrategy reported an adjusted loss of $0.96 per share, versus analysts’ expectations of a loss of $0.94, and its revenue of $125.4 million beat estimates by just 0.05%.

Also read: Madeira’s bitcoin adoption experiment begins

The company’s revenue for the past year reached $119.3 million and $122.1 million, respectively, for the first and second quarters. In the third quarter, subscription services generated $16.4 million, representing a 51% year-over-year increase in MicroStrategy’s fastest-growing revenue stream.


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