MicroStrategy Expands Bitcoin Holdings to $14.7B Amid Quarterly Losses
During its Q2 earnings call, business intelligence firm MicroStrategy reported significant losses, with earnings per share falling to $5.74 on a quarterly revenue of $111.4 million, marking a 7% decline year-over-year. This performance fell short of analyst expectations, which had predicted a quarterly loss of $0.78 per share and revenue of $119.3 million, according to Bloomberg survey data.
MicroStrategy has also announced the purchase of an additional 12,222 Bitcoin for $805 million in the second quarter of this year, bringing its total Bitcoin holdings to 226,500 BTC. At current prices, these holdings are valued at $14.7 billion.
Despite the revenue decline, MicroStrategy's net loss for the second quarter was $123 million, a slight improvement compared to the $137 million net loss reported in the same quarter last year. The firm has acquired its total Bitcoin holdings at a cost of $8.5 billion, averaging $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 revealed that its BTC yield currently stands at 12.2% for the year-to-date period and aims to maintain an annual rate between 4% and 8% over the next three years. In a statement, MicroStrategy explained that BTC Yield helps assess the performance of its Bitcoin acquisition strategy, which it believes is beneficial to shareholders.
The company confirmed its 10:1 stock split, initially announced on July 11, will take effect on August 7. Additionally, MicroStrategy plans to file a registration form for a $2 billion at-the-market equity offering to raise further capital. While the firm did not specify the use of these funds, historically, MicroStrategy has raised capital to purchase more Bitcoin.
Following the release of its Q2 earnings, MicroStrategy's shares fell 6% to $1,500 but bounced back by 1.1% in after-hours trading.
