FINANCE

MicroStrategy buys more Bitcoin, software incurs losses, unrealized fair value of BTC not recognized

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MicroStrategy buys more Bitcoin, software incurs losses, unrealized fair value of BTC not recognized

The Bitcoin development company MicroStrategy announced its first-quarter financial report, revealing a continued increase in Bitcoin holdings. The company currently holds 214,400 bitcoins on its balance sheet, with an average cost of $35,180 per bitcoin. Based on the current price of $63,640 per bitcoin, the unrealized profit amounts to a staggering $6.1 billion.

MicroStrategy Buys Bitcoin Again

MicroStrategy currently holds 214,400 bitcoins on its balance sheet, with a total cost of $7.54 billion and an average cost of $35,180 per bitcoin.

In March, MicroStrategy issued two convertible bond offerings, raising a total of $1.4 billion. With the existing funds, MicroStrategy continued to add to its bitcoin holdings, acquiring 25,100 bitcoins in the first quarter alone.

What is the principle behind MicroStrategy issuing convertible bonds with low interest rates and high stock conversion prices?

The company's founder, Michael Saylor, tweeted that MicroStrategy purchased an additional 122 bitcoins in April, bringing their total holdings to 214,400 bitcoins as of 4/26.

MicroStrategy Transitions into a Bitcoin Development Company

During an interview with CNBC in February, MicroStrategy founder Michael Saylor announced that the company would undergo a rebranding as a "Bitcoin development company." He once again suggested that investing in MicroStrategy stock is better than buying Bitcoin directly because MicroStrategy is also capitalizing on the AI trend!

MicroStrategy emphasizes its development as a "Bitcoin development company" during its financial report meeting, focusing on Bitcoin acquisitions, advocacy programs, and software development related to business intelligence, AI, cloud, and Bitcoin.

Software Business Incurs Losses, Bitcoin Not Recognized at Fair Value

Despite its software business showing losses, with a 5% decrease in revenue amounting to $115.2 million and an operating loss of $10.9 million, MicroStrategy recognized a significant digital asset impairment of $192.8 million, without recognizing Bitcoin at its fair value. Despite Bitcoin's surge to $63K, with an unrealized gain of $6.1 billion, this has not been reflected in MicroStrategy's financial reports.

MicroStrategy Drops 2.6% After-Hours, Saylor Sells 400K Shares

Following the financial report release, MicroStrategy dropped 2.6%. However, benefiting from Bitcoin's rise this year, its stock price has increased by 86% year-to-date.

MicroStrategy founder Michael Saylor began selling 5,000 shares daily starting on January 2nd, and by the end of April, he had sold all 400,000 shares of MicroStrategy stock, bringing in $370 million in revenue. It seems like a very successful sell-off strategy!

Michael Saylor's daily stock selling plan is nearing completion, with proceeds of $370 million from MicroStrategy stock sales

Image Source: CNBC