30 Apr

MicroStrategy buys $1.65B in Bitcoin, now retains 1% of total supply despite revenue dip.

As to MicroStrategy's most recent financial reports, the company has substantially boosted its Bitcoin holdings, having bought an extra $1.65 billion in value in the first quarter.

With the purchase of around 25,250 Bitcoin at an average cost of $65,232 apiece, the corporation now owns 214,400 Bitcoin, or almost 1% of all Bitcoins in circulation.

They invested $7.54 billion in Bitcoin altogether, with an average buying price of $35,180 per coin.

Even though overall sales decreased by 5.5% to $115.2 million from the prior year, MicroStrategy still places a lot of emphasis on Bitcoin.

For 14 straight quarters, the business has increased the value of its assets with Bitcoin. But their income from subscription services jumped by 22% to $23.0 million, suggesting that there is more demand in the market for MicroStrategy's cloud software solutions.

In comparison to the same quarter previous year, when it made $461.2 million in net income, the company reported a net loss of $53.1 million for the quarter. The decline in the value of Bitcoin was the primary cause of this, costing $191.6 million.

The losses associated with Bitcoin caused a significant increase in operating expenses, which increased by 152.8% to $288.9 million. Nevertheless, the gross profit had a 74% gross margin and was $85.2 million.

The price of bitcoin increased significantly; according to Andrew Kang, CFO of MicroStrategy, it reached multiple new highs, the most recent of which was $73,686.93 on March 14. The introduction of spot Bitcoin ETFs, heightened interest from institutional investors, and more transparent regulatory frameworks were cited as the reasons for this surge.

Through two convertible debt offerings, the company raised $1.5 billion during the quarter, with a portion of the proceeds going toward additional Bitcoin acquisitions.

The executive chairman and co-founder of the business, Michael Saylor, is still pushing buying MicroStrategy shares as a smart decision that is comparable to buying Bitcoin outright.

The company's stock has increased by 937% since it began implementing a Bitcoin investing plan on August 10, 2020, thus outpacing both the 52% gain in the S&P 500 and the 435% increase in Bitcoin during that time. 

MicroStrategy is enthusiastic about its vision and the integration of its software with cloud services, even in the face of financial constraints. The company thinks institutional demand for cryptocurrencies would increase with the approval of financial products focused on Bitcoin, which will improve the outlook for its business model. 

April 2024, Cryptoniteuae

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