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MicroStrategy adds nearly 9,000 Bitcoin (BTC) to its holdings in the third quarter

Sat 30 Oct 2021 ▪ 22h29 ▪ 3 min read — by James Taylor

MicroStrategy (Nasdaq: MSTR), a business-intelligence software company, now holds so much Bitcoin it has become somewhat of a proxy for BTC. The other day, the company announced that in the third quarter it added almost 9,000 Bitcoins to its holdings, bringing its total to 114,042. The value of the company’s Bitcoin holdings now stands over $7 billion (~£5.1 billion), while its entire market capitalisation is approximately $7.4 billion.

The company said it acquired Bitcoin by “successfully raising capital in the quarter through at-the-market equity offering.”

The carrying value of MicroStrategy’s Bitcoin was $2.406 billion, which reflects cumulative impairment losses of $754.7 million. Under accounting rules for digital assets, companies must report an impairment if the asset’s price goes below the company’s purchase price at any time during the quarter. As of this writing, the value of Bitcoin holdings owned by the company is just over $7 billion.

The company stated it “continues to evaluate opportunities to raise additional capital to execute on our Bitcoin strategy.”

A long-term strategy

During a MicroStrategy earnings conference call, the company’s CEO Michael Saylor noted that the company intends only to buy BTC, and has no plans to sell it. Saylor called Bitcoin a “great” long-term investment for shareholders, adding that he is open to business with companies that can enable MicroStrategy to buy more Bitcoin.

Saylor said that the last three months have been marked by “extremely dramatic” events for Bitcoin, including some institutional investors’ adoption and ongoing regulatory discussions, as well as Bitcoin ETFs being another “anchor” for institutional investors.

According to the company’s CEO, there’s a “profound game-changing dynamic here with big tech and Bitcoin,” alluding to such innovations as Square’s Cash App and Twitter’s tip option.

Overall, MicroStrategy reported adjusted earnings per share (EPS) of $1.86 on revenues of $128.0 million for the quarter, beating analyst estimates for adjusted EPS of $0.64 and revenues of $127.5 million, according to FactSet.

On Thursday, 28th October, Saylor also retweeted his post from 28th October 2020, announcing that he personally owned 17,732 bitcoins, which he had purchased for just under $10,000. He captioned the tweet with “Don’t sell your Bitcoins”, implying that he still owns all the crypto mentioned. At current prices, it is approximately $1.1 billion (~£799 million).

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James Taylor avatar
James Taylor

Trends are temporary. The blockchain isn’t a trend; it’s the future. I want to help as many people as possible understand it in a simple, clear and interesting way.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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