MicroStrategy’s Bitcoin Write-down Fee Declines During Q3

The largest BTC business owner – MicroStrategy – posted a minimal impairment charge of $727,000 on its bitcoin holdings in Q3 2022 due to the relatively stable price of the asset during this period.

The company bought another 301 coins between July and October, rounding up its total holdings to 130,000 BTC.

Q3 results

The American business intelligence company continued to follow its BTC agenda in the third quarter of 2022 and bought more bitcoin. As you write these lines, the holdings equate to over $2.6 billion.

“To continue its commitment to our bitcoin strategy, MicroStrategy purchased approximately 301 additional bitcoins this quarter and remains the world’s largest publicly traded bitcoin holder, with a total holding of 130,000 bitcoins,” said CFO Andrew Kang.

Despite BTC’s weak price gains in recent days, the company is still sitting on a massive $1.4 billion unrealized loss. It spent nearly $4 billion amassing its inventory over the years at an average price of just over $30,000.

Kang further revealed that MicroStrategy reported a $727,000 impairment charge on its bitcoin holdings in Q3 due to the asset’s relatively stable valuation. In comparison, when BTC’s price ranged between $47,000 and $18,000 in Q2, the firm posted an impairment charge of $917 million.

“We incurred a minimal impairment charge for bitcoin as bitcoin prices were stable in the third quarter and were encouraged by the FASB’s recent announcement of support for fair value accounting for bitcoin.”

Total revenue for Q3 was $125.4 million, beating the Zacks Consensus Estimate by 0.05%. Gross profit reached $100 million, compared to $105.7 million for the third quarter of 2021.

The announced financial numbers had a positive effect on MicroStrategy’s shares, which rose more than 3%. However, they fell to last week’s valuations in subsequent hours.

Future Bitcoin Plans

The co-founder of MicroStrategy and one of the most ardent advocates of bitcoin – Michael Saylor – stepped down as CEO in August and became the executive chairman of the firm. He assured that the changes will benefit the company’s structure and enable it to acquire more BTC.

A recent filing with the securities regulator suggested that MicroStrategy is looking to raise $500 million worth of stock for “general corporate purposes,” including buying bitcoin.