MicroStrategy, a company known for its investments in Bitcoin, recently reported a net loss of $102.6 million in the second quarter. This loss is a significant change from the income of $22.2 million that the company reported in the same period last year. The loss can be attributed to an impairment charge of $180.1 million on its Bitcoin holdings, compared to $24.1 million in the second quarter of the previous year.
Led by Executive Chairman Michael Saylor, MicroStrategy disclosed that it currently holds 226,500 Bitcoins, up slightly from its last announcement in mid-June. These Bitcoins were acquired for $8.3 billion, with an average cost of $36,821 per token. With the current price of Bitcoin at $63,500, the company’s Bitcoin assets are now worth approximately $14.4 billion.
CEO Phong Le expressed optimism about the increasing adoption of Bitcoin and the growing support for the cryptocurrency ecosystem from politicians and institutions. The company’s impairment charge reflects the fluctuation in the value of its Bitcoin holdings compared to the purchase price. While new accounting guidelines allow companies to mark to market their digital asset holdings, it is not yet mandatory for them to do so.
In terms of financial performance, MicroStrategy posted $111.4 million in revenue, slightly lower than analyst estimates of $122 million. The company’s shares fell by 6.5% in the regular trading session prior to the earnings announcement, following a decline in both stock and crypto markets. Over the past year, MicroStrategy’s stock price has more than tripled, reflecting the surge in the price of Bitcoin.
In an effort to make its stock more accessible to investors and employees, MicroStrategy announced a 10-for-1 stock split in July, which became effective recently. The company’s decision to split its stock comes amidst a broader trend of companies taking similar actions to attract a wider range of investors.
It is important to note that CoinDesk, the media outlet covering the cryptocurrency industry, was acquired by the Bullish group in November 2023. CoinDesk operates independently with a focus on journalistic integrity. As the cryptocurrency market continues to evolve, companies like MicroStrategy will likely play a significant role in shaping the future of digital assets and blockchain technology.