Renowned business intelligence firm MicroStrategy has reported its financial results for the second quarter of 2023. He revealed that he has made significant additions to Bitcoin assets. According to Andrew Kang, the company’s Chief Financial Officer, MicroStrategy purchased 12,333 Bitcoins worth $347 million in the second quarter at an average cost of $28,136 per Bitcoin. This crypto purchase represents the largest increase in a single quarter since Q2 2021. Meanwhile, MicroStrategy said it will sell shares to buy more BTC. Here are the details…
MicroStrategy announces cryptocurrency acquisition
According to the Q2 report, MicroStrategy bought 12,333 Bitcoins. However, this is only a fraction of MicroStrategy’s overall Bitcoin purchases. As of July 31, 2023, the company had received a total of 152,800 BTC, or approximately $29,672 per Bitcoin, for $4.53 billion. Despite the high estimates, Bitcoin’s book value was reported to be $2.3 billion, indicating a cumulative impairment loss of $2,196 billion since the first Bitcoin purchase. This resulted in an average book value of $15,251 per Bitcoin.
Despite the difficulties, MicroStrategy emphasized that both Bitcoin and its own MSTR stock outperformed other indices and assets. Since adopting the Bitcoin strategy in August 2020, MSTR stock has gained a notable 254 percent. Bitcoin itself also grew by 145 percent over the same period. MicroStrategy highlighted its commitment to Bitcoin, describing it as a “trusted store of value” and an integral part of its two core strategies alongside its enterprise software business. The company also acknowledged the growing interest of institutional investors in Bitcoin and the growing regulatory clarity surrounding the cryptocurrency.
MicroStrategy, the company with the largest Bitcoin
In addition, MicroStrategy expressed its support for fair value accounting for crypto assets in a letter to the Financial Accounting Standards Board (FASB) in May. This move aims to provide a more convenient view of Bitcoin holdings and is in line with its position as the world’s largest institutional Bitcoin holder. MicroStrategy is keen to further expand its Bitcoin holdings going forward. In July, the company added another 467 BTC for $14.4 million, bringing its total Bitcoin stock to 152,800 BTC. The latest financial report showed net income of $22.2 million for the second quarter of 2023. This is a significant improvement over the $1.1 billion net loss reported in the same period last year. Total revenue remained flat at $120.4 million, but subscription services revenue increased to $19.9 million, a notable 42 percent year-over-year increase.
MicroStrategy has announced its intention to sell up to $750 million of Class A common stock in its filing with the U.S. Securities and Exchange Commission. The company plans to use the proceeds from the sale to purchase more Bitcoin and finance other operational expenses. At the time of this writing, MSTR shares were trading at $436, up 1% in after-hours trading, outperforming Bitcoin’s 80% gain since the start of the year. Bitcoin’s price surged 3% on the day to $29,770, showing signs of an uptrend. Despite the challenges it faces, MicroStrategy remains optimistic about the future of Bitcoin and continues to leverage its financial strength to amass more from the leading cryptocurrency, confident in its position as a key player in the crypto space.
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