MicroStrategy Buys Additional 12,222 Bitcoin, Posts Larger-than-Expected Losses

Business intelligence firm MicroStrategy has significantly increased its Bitcoin holdings by purchasing an additional 12,222 BTC for $805 million in Q2 2024. This latest acquisition brings its total Bitcoin holdings to 226,500 BTC, valued at approximately $14.7 billion based on current market prices.

Financial Performance and Losses

Despite the substantial Bitcoin buy, MicroStrategy reported notable financial losses for the quarter. The company announced a net loss of $123 million in Q2, slightly improving from a $137 million loss in the same period of 2023. The losses of $5.74 per share were significantly higher than analysts’ expectations, which had estimated a loss of $0.78 per share and revenue of $119.3 million, according to Bloomberg.

Quarterly revenue for the firm totaled $111.4 million, marking a 7% year-over-year decline. The revenue figures fell short of analyst predictions, contributing to the negative sentiment surrounding the company’s earnings.

MicroStrategy introduced a new performance metric called “Bitcoin Yield,” which measures the percentage change over time in the ratio of the firm’s Bitcoin holdings to its diluted outstanding shares. The company reported a year-to-date BTC yield of 12.2% and set a target range of 4%–8% annually over the next three years. This new KPI is intended to evaluate the effectiveness of the firm’s Bitcoin acquisition strategy and its impact on shareholder value.

Stock Split and Future Plans

MicroStrategy confirmed that its previously announced 10:1 stock split will take effect on August 7, 2024. Additionally, the firm plans to file a registration form for a $2 billion at-the-market equity offering. While details on the use of the raised capital were not disclosed, it is anticipated that the funds could be allocated towards further Bitcoin purchases, following the company’s historical pattern of using capital to expand its cryptocurrency holdings.

MicroStrategy’s shares were trading at $1,500 as of the latest update, reflecting a 6% decline on August 2. However, the stock saw a 1.1% increase in after-hours trading following the Q2 earnings release, according to TradingView data.

As MicroStrategy continues to build its Bitcoin portfolio, the market will be closely watching the impact of these moves on its financial performance and share price.