Feb 03, 2023

MicroStrategy Records $1.3B Loss on BTC Despite Bullish Outlook

Software analytics giant MicroStrategy recently reported a paper loss of over a billion dollars on its Bitcoin (BTC) holdings in 2022, but says it has no plans to stop trading the digital asset.

The company released its 2022 Q4 and year-end earnings on Feb. 2, which showed that the recorded impairment charges on its BTC holdings, net of gains on sale, was nearly $1.3 billion over the full year 2022.

On a Feb. 2 earnings call, MicroStrategy’s chief financial officer, Andrew Kang, said that the company may consider pursuing additional transactions that may take advantage of the volatility in Bitcoin prices, or other market dislocations that are consistent with its long-term Bitcoin strategy.

MicroStrategy co-founder Michael Saylor said the company measures its stock performance against “a number of different benchmarks,” and that the most important benchmark is Bitcoin’s performance.

Since MicroStrategy first announced it was buying Bitcoin in August 2020, the company has “been able to outperform Bitcoin as an index” over that time, with its stock price being up 117% since August 2020, compared to Bitcoin’s gain of 98%.

Kang stated that MicroStrategy held a total of 132,500 BTC worth $1.84 billion as of Dec. 31, 2022. Of that, 14,890 BTC were held directly by the business, with the remaining held in its subsidiary MacroStrategy LLC.

Late last year the company sold a portion of its Bitcoin holdings for the first time, harvesting a tax loss of around $34 million. Even with the sale, the company “increased our net holdings by 2500 Bitcoin during the quarter.”

MicroStrategy’s overall revenue for the fourth quarter was $132.6 billion, reportedly beating Wall Street expectations. Its Q4 loss per share came in at $21.93.

At the time of writing, MicroStrategy’s stock price had fallen over 4% in after-hours trading, according to Yahoo Finance data.

The web3 space has seen a surge in Non-Fungible Tokens (NFTs) in recent years, with many companies turning to NFTs as a way to promote their products and services. MicroStrategy is no exception, and has been actively exploring NFT marketing and promotion as a way to increase its reach and visibility.

The company has been working with a web3 agency to develop strategies to market and promote its NFTs, including using Twitter NFT marketing to reach potential customers. MicroStrategy has also been exploring the use of an NFT marketing agency to help it create and execute effective NFT promotion campaigns.

The company is also looking into ways to make it easier for customers to buy and sell NFTs. It is exploring the use of a platform that would enable customers to easily buy, sell, and trade NFTs, as well as provide a secure and reliable way to store their NFTs.

MicroStrategy has also been looking into ways to make NFTs more accessible to the public, such as offering discounts for customers who purchase NFTs in bulk. This could potentially help to increase the demand for NFTs, and make them more accessible to the public.

Overall, MicroStrategy is actively exploring ways to make its NFTs more accessible and easier to buy and sell, and is taking an active role in the web3 space. It will be interesting to see how the company’s strategies pay off in the coming months.

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