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MicroStrategy to continue Bitcoin buying despite its impairment loss of $689.6 million on BTC holdings in Q2

CEO Michael Sayler said in its second-quarter earnings announcement that MicroStrategy will continue investing in its digital asset strategy.

Image by Eivind Pedersen from Pixabay

Fri, 30 Jul 2021, 08:24 am UTC

MicroStrategy is recognized as the top publicly listed company with the biggest Bitcoin portfolio. But that isn’t stopping the Tysons, Virginia-based business analytics firm from planning to acquire more of the crypto even as it reported a $424.8 million impairment on its BTC holdings.

On Thursday, CEO Michael Sayler said in its second-quarter earnings announcement that MicroStrategy will continue investing in its digital asset strategy. While the firm reported a $424.8 million impairment for the quarter, it is only a paper loss reflecting Bitcoin’s lower price at the end of Q2.

“We continue to be pleased by the results of the implementation of our digital asset strategy,” Saylor said. “Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy.”

As of June 30, 2021, MicroStrategy held approximately 108,085 BTCs valued at $2.051 billion. The company reported cumulative impairment losses of $689.6 million since acquisition and an average carrying amount per Bitcoin of $19,518.

Despite this impairment, MicroStrategy delivered a strong performance for the second quarter. It posted total revenues of $125.4 million, up 13.4 percent from its revenues for the second quarter of 2020. Similarly, its gross profit for the second quarter rose to $102.3 million, which represents an 81.6% gross margin, compared to a gross margin of 78.3% in the second quarter of 2020.

“MicroStrategy continued its strong 2021 by delivering an outstanding operational performance across the board and completing another successful capital raise to expand our digital asset holdings,” Saylor said. “We had one of our best operational quarters in our software business in years, highlighted by 13% revenue growth.”

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