Originally published on: August 02, 2024
MicroStrategy, a renowned business intelligence firm, made a bold move by purchasing an additional 12,222 Bitcoins worth $805 million in the second quarter of 2024. This hefty investment brought the company’s total Bitcoin stockpile to an impressive 226,500 BTC, valued at around $14.7 billion based on current market prices.
Despite MicroStrategy’s ambitious Bitcoin acquisitions, the firm reported significant losses in its Q2 earnings call. With a quarterly revenue of $111.4 million, MicroStrategy posted losses of $5.74 per share, marking a 7% decline year-over-year. These losses exceeded analysts’ expectations, who had predicted a loss of $0.78 per share and revenue of $119.3 million, according to Bloomberg survey data.
However, there was a glimmer of hope for MicroStrategy as the company revealed a net loss of $123 million in Q2, showing marginal improvement from the previous year’s net loss of $137 million. The firm emphasized that its total Bitcoin holdings, acquired for $8.5 billion at an average price of $36,821 per Bitcoin, played a crucial role in its strategy.
MicroStrategy introduced a new key performance indicator called “Bitcoin Yield,” which tracks the percentage change over time in the ratio between the firm’s Bitcoin holdings and its diluted outstanding shares. The company’s BTC yield currently sits at 12.2% year-to-date, with a target rate of 4%–8% annually over the next three years.
In a strategic move, MicroStrategy announced a 10:1 stock split set to take effect on August 7. Additionally, the company plans to file a registration form for a $2 billion at-the-market equity offering to raise capital, with historic intentions of using capital to purchase more Bitcoin.
Despite a recent 6% drop in its share price to $1,500, MicroStrategy remains optimistic about its future prospects. The firm’s shares saw a 1.1% increase in after-hours trading following the Q2 earnings report, indicating investor confidence in MicroStrategy’s long-term vision.
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