By Shelly Melancon (Switzerland)
Microstrategy’s Bitcoins are now worth an estimated $7B. The firm’s newly released Q3 financial analysis showed that it bought an additional 8,958 Bitcoins this past quarter. The company’s head even revealed that they still plan to increase their BTC holdings.
Microstrategy Is Still Bullish About Bitcoin
Saylor added that “our BTC stash of more than 114,000 BTC makes us the company with the largest BTC holdings. However, we still look forward to other favorable circumstances to increase our holdings so long it conforms with our investment plan.”
The asset management company has quadrupled its holdings since September 2020. As of last month, MicroStrategy’s BTC holdings are 114,043 BTC. Analysts predict that the average buy price for each BTC is $27,714, and it has spent $3.17B in making this purchase.
However, the company’s paper analysis indicates that it has incurred $754.8m worth of this digital asset in impairment loss since making its purchases. Standard accounting procedures compel the company to disclose an impairment loss when the cost basis is higher than the carrying value because the company classifies the digital currency as a “non-tangible asset.” But part of the regulation is that until the company makes profits from a sale, it can’t record any gains from owning the asset.
Stronger Performances Than Expected
Using today’s BTC price, the value of the firm’s BTC is almost $7B. Thus, it would gain about $3.8B if it sells those BTC holdings now. The company sells software solutions to businesses and smartphone users as well as on-demand cloud solutions. It also makes profits through other services and solutions.
Microstrategy’s total profits of $129m for the past quarter surpassed analysts’ projections by about 0.40% and indicated a 0.6% rise from the same quarter of last year. Thus, the company’s earnings per share surpassed the estimates from analysts. Zachs’ analytical firm remarked that the software solutions company has been exceeding projections over the past four Q4s.
The investment analyst company further said, “the report indicates a 66.1% earnings surprise. Forecasted earnings per share for this past quarter was $0.72 but the firm declared $1.73 earnings per share, indicating earnings surprise of 135.63%.”
Comparing 2020 And 2021 Performances
The company CEO emphasized that its strong performance this past quarter was mainly influenced by increased demand for all its services, particularly a broader adoption of its cloud-based solutions.
Microstrategy’s gross profit for Q3 2021 and Q3 2020 is almost the same at $105.8m. However, the net loss differed. Net loss for last year’s third quarter was $14.3m, while that of Q3 2021 was $36.2m. The company’s CEO re-emphasized his bullishness for the leading cryptocurrency, referencing his tweet from last year and commenting on it, said, “you do not sell your bitcoin.”
His last year’s tweet revealed that he owns 17,733 BTC in his personal investment portfolio. As of this writing, MicroStrategy shares have surged by 2% in the past 24 hours. The emerging signs of BTC adoption indicate that the company’s market cap has increased to $7.6B, indicating an 89% increase.
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