Key Takeaways
- MicroStrategy has purchased 169 bitcoins worth $11.4 million in July.
- The company reported a $102.6 million net loss due to digital asset impairment losses.
- MicroStrategy introduced 'BTC Yield,' a KPI to measure Bitcoin strategy performance.
MicroStrategy purchased 169 additional bitcoins worth $11.4 million in July, bringing their total holdings to 226,500 bitcoins at an average price of $36,821.
Global positioning
This acquisition reaffirms MicroStrategy’s position as the world’s largest corporate Bitcoin holder.
Despite the new acquisition, the company reported a significant net loss of $102.6 million for the second quarter ending June 30, attributed to digital asset impairment losses.
The impairment losses indicate that the market value of MicroStrategy’s Bitcoin holdings is lower than the original purchase price.
However, these losses are non-cash accounting charges and do not directly affect the company’s cash flow. In contrast to this financial setback, MicroStrategy experienced a 21% year-over-year increase in subscription service revenue, highlighting its ability to generate substantial income despite market challenges.
Second quarter
In addition to its Bitcoin purchase in July, the company acquired a total of 12,222 bitcoins during the second quarter, totaling 226,500 coins, valued at $8.3 billion based on the original cost.
To evaluate its Bitcoin strategy, MicroStrategy introduced a new key performance indicator (KPI) called “BTC Yield.” This KPI targets a 4-8% annual increase in the ratio between the company’s Bitcoin holdings and its assumed diluted shares outstanding, reflecting shareholder value creation per Bitcoin unit.
Stock split
Additionally, MicroStrategy announced a 10-for-1 stock split for its $2 billion at-the-market equity offering program, scheduled for August 8.
Despite facing impairment losses, MicroStrategy remains committed to its Bitcoin strategy. CEO Phong Le emphasizes the company’s “laser focus” on Bitcoin development and positive BTC Yield, while CFO Andrew Kang underscores their diligent management of equity capital.
