MicroStrategy Reports Q2 Loss; Bitcoin Holdings Rise to 226,500

MicroStrategy (MSTR) reported a second quarter net loss of $102.6 million or $5.74 per share versus income of $22.2 million or $1.52 per share one year earlier.

The loss came as the company took an impairment charge on its bitcoin holdings of $180.1 million versus $24.1 million in the second quarter a year ago.

Led by Executive Chairman Michael Saylor, the company disclosed July 31 bitcoin holdings of 226,500 tokens, up a handful of coins since the latest purchase announcement in mid-June. Those 226,500 bitcoins were acquired for $8.3 billion or an average of $36,821 per token. At the current price of $63,500, those assets are worth about $14.4 billion.

"On the adoption front, we are extremely optimistic with the improved understanding of bitcoin and the increasing support for the ecosystem from bipartisan politicians and institutions on display at the Bitcoin 2024 Conference in Nashville," said CEO Phong Le in the earnings release.

The impairment charge reflects the loss or gain of the company’s bitcoin holdings compared to the price that it was purchased at. While new accounting guidelines allow for companies to mark to market their digital asset holdings, firms are not yet required to do so.

Checking operations, the company posted $111.4 million in revenue versus analyst estimates of $122 million, according to FactSet.

Shares fell 6.5% in the regular trading session prior to earnings on Thursday alongside a steep fall in both stock and crypto markets. MSTR has more than tripled over the past year as the price of bitcoin more than doubled over the same period.

The Nasdaq-listed software firm in July announced a 10-for-1 stock split to make its stock more accessible to investors and employees. That split became effective at the close of business today.