Persistence is true love, MicroStrategy will double down on more Bitcoin trading.

MicroStrategy has released its Q4 and full-year 2022 financial report, revealing that by the end of 2022, the total amount of Bitcoin held has increased to 132,500 coins, with a book value of approximately $1.84 billion and a digital asset impairment of $1.286 billion. Despite the significant losses incurred from the impairment of Bitcoin assets, MicroStrategy remains committed to its belief in long-term purchasing, holding, and increasing its position in Bitcoin.

Summary: "A software company delayed by Bitcoin, what is MicroStrategy's strategy after all?"

Sticking to Bitcoin Delayed

MicroStrategy is a U.S. company that provides business intelligence, data analytics, mobile software development, and cloud computing services. In terms of its core business, MicroStrategy's gross profit margin is approximately 80%, making it a profitable company. After deducting operating expenses such as sales and marketing, the operating profit margins are 11.87%, 9.02%, and 2.11%, respectively. It is worth noting that because MicroStrategy considers purchasing Bitcoin as an important part of the company's development strategy, the evaluation loss of Bitcoin market price is also included in the operating expenses on the financial statements. It is evident that the expenses related to Bitcoin purchase and custody are included in the administrative expenses within the operating expenses.

The asset impairment caused by the decline in Bitcoin prices has led MicroStrategy's full-year EPS for 2022 to be -$129.83. However, the company continues to adhere to its Bitcoin strategy. The recent stabilization of Bitcoin prices has also significantly boosted its stock price, rising from $134 at the beginning of the year to $284.76. It is quite admirable that the stock price can perform so well despite being in a loss-making situation!

Lightning Network Platform

During a conference call, CEO Phong Le mentioned that MicroStrategy has utilized Bitcoin Layer 2 Lightning Network technology to develop a Lightning platform for enterprise use. It will be an independent cloud platform designed to address the current situation where digital content and profits are dominated by internet giants. The platform will use Lightning rewards to incentivize users. Currently, this platform is still in the development stage and is only available for MicroStrategy employees.

Bitcoin Strategy

Chief Financial Officer Andrew Kang stated during the conference call:

We are considering more Bitcoin transactions based on the volatility of Bitcoin prices or market chaos, which are consistent with our long-term Bitcoin strategy.

MicroStrategy also showcased the performance of its stock price since adopting the Bitcoin strategy in August 2020, with a 117% increase outperforming Bitcoin's 98% and other tech giants. It seems that even though MicroStrategy co-founder Michael J. Saylor has stepped down as CEO, the new CEO and CFO are also faithful believers in Bitcoin, sticking to their commitment to the cryptocurrency.