MicroStrategy Adds Almost 9,000 Bitcoins to Its Holdings in Third Quarter

28 October 2021

MicroStrategy (Nasdaq: MSTR), the business-intelligence software company that holds so much bitcoin on its balance sheet that it has become something of a proxy for the world?s biggest cryptocurrency, said it added almost 9,000 bitcoins to its holdings in the the third quarter, bringing its total to 114,042.

  • The company said it purchased the bitcoin by ?successfully raising capital in the quarter through our at-the-market equity offering.?
  • At current prices, the value of its bitcoin holdings is just over $7 billion; MicroStrategy?s entire market capitalization is roughly $7.4 billion.
  • The carrying value of MicroStrategy?s bitcoin was $2.406 billion, which reflects cumulative impairment losses of $754.7 million. Under accounting rules for digital assets, companies must report an impairment if the asset?s price goes below the company?s purchase price at any time during the quarter.
  • The company said it will ?continue to evaluate opportunities to raise additional capital to execute on our bitcoin strategy.?
  • CEO Michael Saylor said on MicroStrategy?s earnings conference call that the company is committed to buying bitcoin and doesn?t have plans to sell. Saylor called bitcoin a ?great? long-term investment for shareholders.
  • Saylor is open to partnerships that may allow MicroStrategy to buy more bitcoin.
  • Saylor said that the last three months have displayed ?extremely dramatic? developments for bitcoin, including more institutional adoption and continuing regulatory discussions. Bitcoin-linked ETF?s are another ?checkbox? for institutional investors, Saylor said.
  • Saylor added there?s a ?profound game-changing dynamic here with big tech and bitcoin,? touting such examples as Square?s Cash App and Twitter?s tip option.
  • Overall, MicroStrategy reported adjusted earnings per share (EPS) of $1.86 on revenues of $128.0 million for the quarter, beating analyst estimates for adjusted EPS of $0.64 and revenues of $127.5 million, according to FactSet.
  • Shares of MicroStrategy were rising 1.3% postmarket to about $727 on Thursday.
  • On Thursday, Saylor also retweeted a previous tweet of his from Oct. 28, 2020, revealing that he personally owned 17,732 bitcoin that he purchased for an average price of just under $10,000. He added the comment that ?you do not sell your #bitcoin,? implying that he still owned all those coins. At current prices, they would be worth roughly $1.1 billion.

UPDATE (Oct. 28, 22:23 UTC): Adds commentary from earnings conference call.

UPDATE (Oct. 29, 12:42 UTC): Adds information about Saylor?s bitcoin holdings.

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