MicroStrategy Adds Almost 9,000 Bitcoins to Its Holdings in Third Quarter

MicroStrategy (Nasdaq: MSTR), the business-intelligence software company that holds so much bitcoin on its balance sheet that it has become something of a proxy for the world’s biggest cryptocurrency, said it added almost 9,000 bitcoins to its holdings in the the third quarter, bringing its total to 114,042.

• The company said it purchased the bitcoin by “successfully raising capital in the quarter through our at-the-market equity offering.”
• At current prices, the value of its bitcoin holdings is just over $7 billion; MicroStrategy’s entire market capitalization is roughly $7.4 billion.
• 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.
• The company said it will “continue to evaluate opportunities to raise additional capital to execute on our bitcoin strategy.”
• CEO Michael Saylor said on MicroStrategy’s earnings conference call that the company is committed to buying bitcoin and doesn’t have plans to sell. Saylor called bitcoin a “great” long-term investment for shareholders.
• Saylor is open to partnerships that may allow MicroStrategy to buy more bitcoin.
• Saylor said that the last three months have displayed “extremely dramatic” developments for bitcoin, including more institutional adoption and continuing regulatory discussions. Bitcoin-linked ETF’s are another “checkbox” for institutional investors, Saylor said.
• Saylor added there’s a “profound game-changing dynamic here with big tech and bitcoin,” touting such examples 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.
• Shares of MicroStrategy were rising 1.3% postmarket to about $727 on Thursday.
• On Thursday, Saylor also retweeted a previous tweet of his from Oct. 28, 2020, revealing that he personally owned 17,732 bitcoin that he purchased for an average price of just under $10,000. He added the comment that “you do not sell your #bitcoin,” implying that he still owned all those coins. At current prices, they would be worth roughly $1.1 billion.

UPDATE (Oct. 28, 22:23 UTC): Adds commentary from earnings conference call.

UPDATE (Oct. 29, 12:42 UTC): Adds information about Saylor’s bitcoin holdings.