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, compared with revenue of $22.2 million, or $1.52 per share, a year earlier.

The loss was due to the company recording a $180.1 million impairment charge on its Bitcoin holdings, compared to $24.1 million in the same period a year earlier.

The company, led by Chairman Michael Saylor, announced its bitcoin holdings as of July 31 at 226,500 tokens, up a handful since its last purchase announcement in mid-June. Those 226,500 bitcoins were purchased for $8.3 billion, or an average of $36,821 per token. At the current price of $63,500, those holdings are worth about $14.4 billion.

“On the adoption front, we are extremely optimistic given the better understanding of Bitcoin and the growing support for the ecosystem from bipartisan politicians and institutions demonstrated at the Bitcoin 2024 Conference in Nashville,” CEO Phong Le said in the earnings release.

The impairment charge reflects the company’s loss or gain compared to the price at which its bitcoin holdings were purchased. While new accounting guidelines allow companies to value their digital asset holdings based on market value, they are not yet required to do so.

The company, which controls operations, had revenue of $111.4 million, compared with analysts’ estimate of $122 million, according to FactSet.

Shares fell 6.5% in the regular trading session ahead of earnings on Thursday, a major downturn across both the equity and crypto markets. MSTR has more than tripled in the past year as the price of bitcoin has more than doubled in the same period.

The Nasdaq-listed software company announced a 1-for-10 stock split in July to make its shares more accessible to investors and employees. The split went into effect at the close of business today.