MicroStrategy Disclosed Narrowed Net loss of $27.1 Million

In the Q3 earnings report of MicroStrategy, a narrowed net loss of $27.1 Million for the quarter has been noted.
Instead of poor market conditions, the firm continued its growth in the Bitcoin portfolio.

MicroStrategy has outperformed since the adoption of Bitcoin strategy. The firm owns around 130,000 Bitcoin at the end of its third quarter 2022 report. This amount indicates 0.62% of owned Bitcoin was gained for a total cost of about $4 Billion.

MicroStrategy is a Business Intelligence firm and the largest publicly traded corporate Bitcoin owner. It has released its Q3 2022 Financial Report on November 1, 2022.

In the Q3 report, the firm has shown digital asset impairment decrease in the price of Bitcoin versus the price at which it was acquired. Alongwith, as mentioned in the Q3 report impairment charges for the quarter of $727,000, quite less than the $917.8 Million the firm has noted in its Q2 (Second Quarter) report of this year. It must be noted that an impairment charge in any financial report represents a process used by businesses to write off worthless goodwill.

The firm urged support from the Financial Accounting Standards Board of the use of fair value accounting for the most-traded cryptocurrency, Bitcoin.

Leaders Talk

Michael Saylor, Executive Chairman and Co-Founder of MicroStrategy, recalled the optimistic view of company’s CFO, Andrew Kang. In the conference call on November 2, 2022, Mr. Saylor said that “It doesn’t mean that we have enough guidance to change our accounting. We know we have unanimous support to adopt fair value accounting for bitcoin.”

However, Saylor resigned from his position as CEO on August 8, 2022, but still works as an Executive Chairman.

The Chief Financial Officer of MicroStrategy, Andrew Kang, further seemed optimistic as he said that the changes like the Financial Accounting Standards Board made for Bitcoin would “If finally adopted and implemented, we believe fair value accounting will improve upon the current, unfavorable intangible accounting treatment applicable to Bitcoin holdings and will promote additional institutional adoption of Bitcoin as an asset class.”

Furthermore, the President and Chief Executive Officer of MicroStrategy said during an earning call that “We have not sold any Bitcoin to date. To reiterate our strategy, we seek to acquire and hold Bitcoin for the long term. And we do not currently plan to engage in sales of Bitcoin. We have a long-term time horizon and the core business is not impacted by the near-term Bitcoin price fluctuations.”

MicroStrategy’s Q3 report has an adjusted quarterly loss of $0.96 per share that opposes an analyst estimate of $0.94, which compares to earnings of $1.86 per share a year ago.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing