MicroStrategy CEO reiterates ‘long-term’ Bitcoin play in Q3 earnings

Third-quarter earnings for business intelligence firm MicroStrategy revealed a narrowed net loss of $27.1 million for the quarter, as it continues to grow its Bitcoin (BTC) portfolio despite poor crypto market conditions.

The world’s largest publicly traded company’s Bitcoin owner confirmed that it still owns 130,000 BTC at the end of Q3 2022. This amount represents 0.62% of all Bitcoin that will ever be owned, which it says was acquired for a total cost of around $4 billion, or $30,639 per BTC.

On November 1, the company reported write-downs for the quarter of $727,000, far less than the $917.8 million it recorded in the second quarter of 2022 or $65 million for the same period last year, thanks to stable Bitcoin prices throughout the last quarter.

An impairment charge is an accounting term used by businesses to describe a reduction in the value of assets held, and according to MicroStrategy, it had accumulated impairment losses of approximately $2 billion as of Sept. 30.

In an earnings call for MicroStrategy, president and CEO, Phong Le reiterated the company’s long-term hodling strategy, saying:

“We have not sold any Bitcoin to date. To reiterate our strategy, we seek to acquire and hold Bitcoin for the long term. And we currently do not plan to engage in the sale of Bitcoin. We have a long-term time horizon and our core business is not affected of the short-term Bitcoin price fluctuations.”

Michael Saylor, who stepped down as CEO on August 8 but remains with the company as executive chairman, mentioned in the call that since he began his Bitcoin strategy on August 11, 2020, the company’s share price has increased by 116% compared to Bitcoin’s 72% increase for the same period.

In the accompanying earnings report, CFO Andrew Yang gave a nod to the recent announcement by the United States Financial Accounting Standards Board’s decision to support “fair value accounting” for Bitcoin, noting:

“If finally adopted and implemented, we believe fair value accounting will improve the current unfavorable intangible accounting treatment applicable to Bitcoin holdings and will promote further institutional use of Bitcoin as an asset class.”

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

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The firm’s revenue over the past year has reached $119.3 million and $122.1 million for Q1 and Q2, respectively. $16.4 million of revenue in the third quarter came from subscription services, representing a 51% year-over-year increase in what is MicroStrategy’s fastest-growing revenue stream.