MicroStrategy reported earnings and cut bitcoin buying losses
Michael Saylor's MicroStrategy did not sell Bitcoin in the first quarter of 2023
The bitcoin exchange rate at the time of the report's publication is as close as possible to the company's average purchase price for the cryptocurrency
Michael Saylor's MicroStrategy recorded far fewer losses related to its bitcoin holdings last quarter compared to the last three months of 2022, helped by the cryptocurrency's rally.
The company posted net income of $461 million ($31.79 per share) in the first quarter, compared to a loss of $130.8 a year earlier.
The company did not sell bitcoins. The impairment loss (the amount by which the book value of an asset exceeds its recoverable amount) on MicroStrategy's digital assets was $18.9 million in the first quarter, down from the fourth quarter of 2022 ($197.6 million) and a year earlier ($170.1 million), the company said in a statement.
The company also bought more bitcoins in the first quarter, bringing its holdings to 140,000 BTC, and paid off a loan from the collapsed Silvergate Bank ahead of schedule. Combined, the company paid $4.17 billion for them at an average purchase price of $29,803 per bitcoin, including asset acquisition costs.
"Ultimately, it's not easy to know what the best strategy might be," Saylor said during a phone call with Bloomberg, "We realized that just by buying and holding bitcoin, we could outperform our peers in the business. The regulatory environment for Bitcoin is improving. As capital leaves the crypto industry, it comes to bitcoin."
Shares of the company (MSTR) were up about 2 percent in over-the-counter trading Monday following the release of its quarterly results.
Saylor stepped down as MicroStrategy's CEO in the summer of 2022 but continued as chairman of the company. This allowed him to focus more on MicroStrategy's Bitcoin acquisition strategy and related initiatives.
MicroStrategy is the largest corporate holder of bitcoins. Marathon Digital, a mining company, and Coinbase, the second-largest cryptocurrency exchange, are also among the top three publicly traded companies in terms of the cryptocurrency's holdings.