- MicroStrategy reported a Q2 net loss of $102.6 million due to a $180.1 million impairment charge on its bitcoin holdings.
- The company’s bitcoin holdings rose to 226,500 tokens, acquired at an average price of $36,821 per coin, worth around $14.4 billion at current prices.
- MicroStrategy announced a 10-for-1 stock split to make its shares more accessible to investors and employees.
MicroStrategy (MSTR), a software company led by Bitcoin proponent Michael Saylor, reported a net loss in the second quarter as it took an impairment charge on its Bitcoin holdings. However, the company continues to acquire more Bitcoin and remains optimistic about adoption.
Q2 Financial Results Reflect Bitcoin Impairment Charge
MicroStrategy reported a second quarter net loss of $102.6 million or $5.74 per share, compared to income of $22.2 million or $1.52 per share a year earlier.
The loss resulted from the company taking an impairment charge on its Bitcoin holdings of $180.1 million, versus $24.1 million in the second quarter last year.
An impairment charge reflects the loss or gain on the company’s Bitcoin compared to the price it was originally purchased at. While new accounting rules allow firms to mark digital assets to market value, MicroStrategy still uses the original cost basis.
MicroStrategy posted revenues of $111.4 million for the quarter, slightly below analyst estimates of $122 million according to FactSet.
Bitcoin Holdings Grow to 226,500 BTC
As of July 31, MicroStrategy holds 226,500 Bitcoins, acquired at an average price of $36,821 per coin. The company spent a total of $8.3 billion to accumulate its Bitcoin treasury.
At the current Bitcoin price around $63,500, the holdings are worth approximately $14.4 billion – nearly triple their purchase value.
MicroStrategy continues to buy Bitcoin when possible. The additional coins were acquired since the last purchase announcement in mid-June.
Optimism Around Bitcoin Adoption
Despite the impairment charge, MicroStrategy remains extremely bullish on Bitcoin adoption long-term.
“We are optimistic with the improved understanding of Bitcoin and increasing institutional support, as seen at the recent 2024 Bitcoin Conference,” said CEO Phong Le.
Other recent positive adoption signals include the stock split to make MSTR shares more accessible, and bipartisan political and institutional support for crypto.
Conclusion
While short-term accounting losses on its Bitcoin are inevitable with volatility, MicroStrategy is playing the long game.
With its massive Bitcoin treasury and relentless advocacy, the company continues to be one of the most influential organizations in making cryptocurrency mainstream.
