MicroStrategy has added almost 9,000 bitcoins to its balance sheet in Q3, adding about eight percent to its existing holdings that now total 114,042.
MicroStrategy betting big on Bitcoin
Michael Saylor may be the most famous, or infamous, Bitcoin bull in the crypto space. Many are calling for the Bitcoin price to “moon,” but few are as willing to put their money where their mouth is as Saylor. As CEO of MicroStrategy, technically a business intelligence software company, Saylor used to be an opponent of Bitcoin. He has reversed course since and has done so in such dramatic fashion that his company is now basically a proxy for the popular cryptocurrency.
114,042 bitcoins are now on the balance sheets of MicroStrategy, about 9,000 more than three months ago. At current prices, that amounts to over $7 billion worth of bitcoin, which is quite astonishing, considering that the company’s entire market capitalisation is roughly $7.4 billion. With the carrying value of MicroStrategy’s bitcoin being $2.406 billion, cumulative impairment losses amount to $754.7 million. An impairment loss is defined as the asset’s price going below the company’s purchase price and must be reported to its shareholders under current accounting rules.
Michael Saylor continues being all-in on Bitcoin
Where some CEOs would sweat with such exposure to a single asset on their balance sheet, Michael Saylor seems to be just getting started. On an earnings conference call, he said that the company would be committed to buying bitcoin and doesn’t have plans to sell. Bitcoin would be a “great” long-term investment for shareholders, and the company would “continue to evaluate opportunities to raise additional capital to execute on our bitcoin strategy.”
Saylor also expressed interest in partnerships that would allow MicroStrategy to buy more bitcoin. With the last three months displaying “extremely dramatic” developments for bitcoin thanks to more institutional adoption and continuing regulatory discussions, Bitcoin ETF’s would be another “checkbox” for institutional investors. Saylor was also bullish on the relationship between big tech and bitcoin, especially in the light of Square’s Cash App and Twitter’s tip option.
MicroStrategy’s reported adjusted earnings per share (EPS) of $1.86 on revenues of $128 million for the quarter, overperformed analyst estimates of $0.64 and $127.5, respectively. Its shares rose 1.3% following the earnings call. Saylor supposedly also holds 17,732 bitcoin himself that he had purchased for an average price of just under $10,000. That would put him in the billionaire’s club, with the current price of that amount of bitcoin being worth just over $1.1 billion.
Is there more to come?
Like him or not, Michael Saylor’s aggressive strategy has been paying off so far. Moreover, he is right in his analysis that Bitcoin continues to attract institutional investors and that it’s probably going to be only more in demand in the future. With institutional investors looking to replace gold with bitcoin and even fund manager legends like George Soros, an outspoken Bitcoin critic, admitting that BTC has gone mainstream, you can’t help but wonder if more companies will emulate Michael Saylor’s strategy in the near future.
