MicroStrategy Expands Bitcoin Holdings to $14.7B Amid Quarterly Losses

MicroStrategy Raises Bitcoin Holdings to $14.7 Billion Amid Quarterly Losses

Business intelligence firm MicroStrategy reported significant losses during its Q2 earnings call, with earnings per share falling to $5.74 on quarterly revenue of $111.4 million, a 7% decline from a year earlier. That performance fell short of analyst expectations, which had forecast a quarterly loss per share of $0.78 and revenue of $119.3 million, according to Bloomberg survey data.

MicroStrategy also announced that it will purchase an additional 12,222 Bitcoins for $805 million in the second quarter of this year, bringing its total Bitcoin holdings to 226,500 BTC. At current prices, these assets are worth $14.7 billion.

Despite the revenue decline, MicroStrategy’s net loss in the second quarter was $123 million, a slight improvement from the $137 million net loss reported in the same quarter last year. The company purchased its total Bitcoin holdings at a cost of $8.5 billion, an average of $36,821 per Bitcoin.

MicroStrategy also introduced a new key performance indicator, “Bitcoin Yield,” which measures the percentage change over time in the ratio between the firm’s Bitcoin holdings and its diluted outstanding shares. The company said its BTC return is currently 12.2% year-to-date and aims to maintain an annual rate between 4% and 8% for the next three years. MicroStrategy explained in a statement that BTC Yield helps evaluate the performance of its Bitcoin acquisition strategy, which it believes is beneficial to shareholders.

The company confirmed that the 10:1 stock split, initially announced on July 11, will go into effect on August 7. Additionally, MicroStrategy plans to file a registration form for a $2 billion market cap stock offering to raise more capital. Historically, MicroStrategy has raised capital to purchase more Bitcoin, though the company did not specify the use of these funds.

Shares of MicroStrategy fell 6% to $1,500 after reporting Q2 earnings but recovered 1.1% in after-hours trading.