MicroStrategy Reports Q2 Loss Amid Aggressive Bitcoin Acquisition Strategy

03. Aug 2024 Posted by Laurent C. on News

MicroStrategy's stock saw a modest after-hours increase of 1%, following the announcement of a $123 million net loss for Q2 2024. Despite this, the business intelligence firm remains bullish on its Bitcoin strategy, having acquired an additional 12,222 Bitcoin worth $805 million during the quarter. This acquisition brings MicroStrategy's total Bitcoin holdings to a staggering 226,500 BTC, currently valued at approximately $14.7 billion.

During the Q2 earnings call, MicroStrategy reported a significant per-share loss of $5.74 on quarterly revenue of $111.4 million, reflecting a 7% year-over-year decline. This performance fell short of analysts' predictions, who had anticipated a loss of $0.78 per share on $119.3 million in revenue. Nevertheless, the $123 million net loss marked a slight improvement compared to the $137 million loss in Q2 2023. The company's Bitcoin holdings have been acquired for a total of $8.5 billion, averaging $36,821 per Bitcoin.

In a noteworthy development, MicroStrategy introduced a new key performance indicator (KPI) dubbed "Bitcoin Yield." This metric measures the percentage change over time in the ratio between the company's Bitcoin holdings and its diluted outstanding shares, which include common stocks and shares from convertible notes or stock options. Currently, the BTC yield stands at 12.2% year-to-date, with a targeted annual rate of 4%-8% over the next three years.

"The Company uses BTC Yield as a KPI to help assess the performance of its strategy of acquiring Bitcoin in a manner the Company believes is accretive to shareholders," MicroStrategy stated.

Additionally, MicroStrategy confirmed the implementation of a previously announced 10:1 stock split, set to take effect on August 7. 

Looking ahead, the company plans to file for a $2 billion at-the-market equity offering to raise additional capital, though specific uses for the funds were not disclosed. Historically, MicroStrategy has used raised capital to bolster its Bitcoin holdings.

As of this writing, MicroStrategy shares are trading at $1,500, having dropped 6% on August 2. However, the share price saw a 1.1% rebound in after-hours trading following the Q2 earnings report. 

The firm's continued investment in Bitcoin and the introduction of innovative performance metrics highlight its commitment to integrating cryptocurrency into its core strategy, despite the financial challenges faced.