MicroStrategy Reports Q2 Loss Amid Bitcoin Impairment but Remains Strong in Holdings
MicroStrategy reported a significant loss in Bitcoin holdings but reaffirmed that the company is standing strong with its holdings.
MicroStrategy is a Nasdaq-listed business intelligence firm. Under the leadership of former CEO Michael Saylor, MicroStrategy became a prominent Bitcoin bull. A couple of years ago, Saylor stepped down from the CEO role to focus on the company’s Bitcoin-related initiatives.
On 2 August 2024, MicroStrategy (MSTR) reported a second-quarter net loss of $102.6 million, or $5.74 per share, compared to an income of $22.2 million, or $1.52 per share, one year earlier. This loss is primarily due to a significant impairment charge on its bitcoin holdings of $180.1 million, a sharp increase from the $24.1 million impairment charge recorded in the same quarter last year.
Under the leadership of Executive Chairman Michael Saylor, MicroStrategy disclosed that it holds 226,500 bitcoins. This is a slight increase from the last purchase announcement in mid-June.
The company acquired these bitcoins for a total of $8.3 billion, with an average purchase price of $36,821 per token. At the current market price of $63,500 per bitcoin, the value of these holdings is approximately $14.4 billion.
Despite the financial loss, MicroStrategy remains optimistic about its bitcoin strategy. CEO Phong Le stated, “On the adoption front, we are extremely optimistic with the improved understanding of bitcoin and the increasing support for the ecosystem from bipartisan politicians and institutions, as demonstrated at the Bitcoin 2024 Conference in Nashville.”
The impairment charge reflects the difference between the purchase price of the company’s bitcoin holdings and their current market value. While new accounting guidelines allow companies to mark their digital asset holdings to market, firms are not yet required to do so.
MicroStrategy’s continued accumulation of bitcoin and its optimistic outlook highlight the company’s commitment to its bitcoin strategy, despite the short-term financial setbacks.
Read also: Grayscale BTC Spot ETF Attracts $191 Million Inflow While Other Bitcoin ETFs See Outflows
