MicroStrategy’s Bitcoin Impairement Charge Eases During Q3

The largest BTC corporate holder – MicroStrategy – posted a minimal impairment charge of $727,000 on its bitcoin ownings in Q3, 2022 due to the relatively stable price of the asset during that period.

The company purchased additional 301 coins between July and October, rounding up its total holdings to 130,000 BTC.

The Q3 Results

The American business intelligence corporation continued to follow its BTC agenda during the third quarter of 2022 and bought more bitcoin. As of writing these lines, its holdings equal over $2.6 billion.

“Furthering the commitment to our bitcoin strategy, MicroStrategy acquired approximately 301 additional bitcoins this quarter and remains the world’s largest publicly traded corporate owner of bitcoin, with total holdings of 130,000 bitcoins,” Chief Financial Officer Andrew Kang stated.

Despite BTC’s slight price rally in the past few days, the company still sits on a massive $1.4 billion unrealized loss. It spent almost $4 billion to accumulate its stash over the years at an average price of just over $30,000.

Kang further revealed that MicroStrategy reported an impairment charge of $727,000 on its bitcoin possessions in Q3 due to the asset’s relatively stable valuation. In comparison, when BTC’s price varied between $47,000 and $18,000 in Q2, the firm posted an impairment charge of $917 million.

“We incurred a minimal bitcoin impairment charge as bitcoin prices were stable during the third quarter and were encouraged by FASB’s recent announcement of its support for fair value accounting for bitcoin.”

Total revenues for Q3 were $125.4 million, surpassing the Zacks Consensus Estimate by 0.05%. Gross profits reached $100 million, compared to $105.7 million for the third quarter of 2021.

The announced financial figures positively affected MicroStrategy’s shares, which rose by over 3%. However, they dropped to last week’s valuations in the following hours.

The Future Bitcoin Plans

The Co-Founder of MicroStrategy and one of the keenest proponents of bitcoin – Michael Saylor – stepped down as the CEO in August and became an Executive Chairman of the firm. He assured that the amendments will benefit the company’s structure and enable it to acquire more BTC.

A recent filing with the securities regulator suggested that MicroStrategy is looking to raise $500 million worth of its stocks for “general corporate purposes,” including the purchase of bitcoin.