MicroStrategy’s Bitcoin Acquisition and Performance Update
MicroStrategy announced on Thursday that since the beginning of the second quarter, it has acquired 12,222 bitcoin for $805.2 million and introduced a new key performance indicator (KPI) for its bitcoin strategy.
As of July 31, the company’s total bitcoin holdings stand at 226,500 BTC (up 4.19%), costing a total of $8.3 billion, or $36,821 per bitcoin.
The company reported a BTC yield of 12.2% year-to-date, aiming for an annual yield of 4% to 8% over the next three years. BTC yield is calculated as the percentage change over time in the ratio of MicroStrategy’s bitcoin holdings to its diluted shares outstanding. Diluted shares include all actual common stock shares and any potential shares from options and convertible instruments. This metric evaluates how bitcoin holdings compare to potential total shares.
MicroStrategy stated, “The Company uses BTC Yield as a KPI to help assess the performance of its strategy of acquiring bitcoin in a manner it believes benefits shareholders.”
However, the BTC yield KPI is not intended as a measure of operational performance, financial health, or liquidity.
CEO Phong Le expressed optimism about bitcoin adoption following positive developments at the Bitcoin 2024 Conference in Nashville and noted continued growth in the company’s cloud-powered BI and AI software, achieving strong double-digit growth in subscription revenue and billings.
In terms of financial results, MicroStrategy reported a quarterly loss of $5.74 per share on sales of $111.40 million, which is a 7% decrease from the previous year. This significant miss compared to analysts’ expectations of a loss of 78 cents per share and revenues of $119.3 million.
Operating expenses reached $280.8 million, marking a 134% increase compared to the same period last year. This includes impairment losses on digital assets amounting to $180.1 million, compared to $24.1 million in Q2 2023.
Additionally, MicroStrategy confirmed that its previously announced 10-for-1 stock split will be effective Aug. 7 and plans to file a registration for a new $2 billion at-the-market equity offering program.
As of the last trading session, MicroStrategy’s stock closed down 6% at $1,511.81 per share; however, it remains up 120% year to date.
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