Updated: Jul 18, 2022
MicroStrategy added almost 9,000 Bitcoin to its holdings in Q3, bringing its total BTC stash to a valuation of around $7 billion.
The company highlighted the purchase of 8,957 BTC in its Q3 report on Oct. 28, with the firm’s perma-bull CEO Michael Saylor stating that there is more BTC accumulation to come:
“Today, MicroStrategy is the world’s largest publicly traded corporate owner of Bitcoin with over 114,000 Bitcoins. We will continue to evaluate opportunities to raise additional capital to execute on our Bitcoin strategy.”
The software firm has increased its Bitcoin holdings by 198% since the same period last year, and as of Sept. 30 the total stood at 114,042 BTC with an estimated average purchasing price of $27,713 per coin, or a total spend of $3.16 billion.
On paper, Microstrategy posted a carrying value of $2.406 billion for its BTC holdings at an impairment loss of $754.7 million since the acquisition, however this is a paper loss.
As the firm categorizes Bitcoin as an “intangible asset,” accounting rules mandate that it must report an impairment loss when the carrying value dips below its cost basis. However, the firm is not required to report any paper gains on the asset until a profit is realized through a sale.
As BTC is priced at roughly $60,600 at the time of writing, the value of MicroStrategy’s holdings equates to around $6.9 billion, suggesting that the firm would make nearly $3.75 billion in profit if it sold today.
MicroStrategy provides business intelligence software, mobile app software and cloud-based solutions, and the firm pulls in revenue via streams such as product licensing and subscription services.
The firm reported $128 million worth of total revenue for the quarter, beating the Zacks Consensus Estimate by 0.39% and marking a 0.5% increase compared to MicroStrategy’s Q3 results from 2020.
While Micostrategy’s revenue squeaked past estimates, the firm posted earnings of $1.86 per share compared to the forecast $1.12 per share. The investment research firm highlighted yesterday that MicroStrategy has surpassed consensus estimates three times “over the last four quarters.”
“This quarterly report represents an earnings surprise of 66.07%. A quarter ago, it was expected that this business software company would post earnings of $0.73 per share when it actually produced earnings of $1.72, delivering a surprise of 135.62%,” said Zacks Investment Research.
Saylor highlighted in the report that “overall demand” for the MicroStrategy platform and growing adoption of the firm’s cloud-based solutions contributed to the firm’s strong performance in Q3.
The firm posted a gross profit of $105.7 million for the quarter, with the figure tallying in the same as the year before. Net loss for the quarter was $36.1 million, or $3.61 per share compared to the loss of $14.2 million or $1.48 per share in Q3 2020.
Earlier today, Saylor reiterated his bullishness for digital gold by stating that “you do not sell your Bitcoin” as he retweeted his own post from October 2020 revealing personal holdings of 17,732 BTC.