MicroStrategy (MSTR)an enterprise business intelligence platform that provides software, cloud computing, and other services to numerous clients, is also one of the largest Bitcoin holders in the world, with approximately 140,000 BTC.
Beat Your Opponents With Bitcoin
The decision to buy bitcoin in bulk was made in 2020, when Michael Saylor was still in the CEO role, citing inflation concerns. According to him, simply holding BTC gives MicroStrategy an edge over its competitors in the BI industry.
“In the end it didn’t seem like there was a better strategy. We found that it was possible to outperform competitors in the enterprise software business just by buying and holding Bitcoin. The regulatory environment for Bitcoin is improving. When money flows out of the crypto industry, it Inflows into bitcoin,” said Michael Saylor.
The above statement seems to contradict recent developments in the crypto industry, with spokespersons for giants such as Coinbase, Kraken, and private investors criticizing the U.S. government and other private investor agencies for trying to regulate by enforcing enforcement rather than maintaining discussions with them. Regulated company.
First quarterly profit in two years
Bitcoin is up more than 70% in the first quarter of 2023 despite the current uncertainty over crypto regulation in the U.S. and elsewhere.
MicroStrategy reported quarterly net income of $461 million for the first quarter, with the company’s stock trading at $31.79 at press time, and revenue for the quarter also rose 2.2 percent to $121 million.
This development is due in part to tax incentives for MicroStrategy’s Bitcoin repository. The company took advantage of impairment charges related to its bitcoin holdings, resulting in the company taking an $18.9 million tax break last quarter.
Depreciation cost is defined as the difference between an asset’s book value and its recoverable value.
MicroStrategy continues to strengthen its balance sheet by taking advantage of Bitcoin’s price action to repay a loan from Silvergate at a 22% discount.
MicroStrategy repaid its $205 million Silvergate loan at a 22% discount. As of 3/23/23, $MSTR Buy an additional ~6,455 bitcoins for ~$150 million, averaging ~$23,238 each #bitcoin And hold about 138,955 BTC, acquired at a price of about $4.14B, an average of about $29,817 per bitcoin. https://t.co/ALp9VLkTpt
– Michael Saylor ⚡️ (@saylor) March 27, 2023
“MicroStrategy repaid a $205M loan from Silvergate at a 22% discount. Since March 23, MSTR bought an additional 6,455 BTC ($150M) at an average price of $23,238 and currently holds 138,955 BTC worth 41.4 billion, with an average price of $29,817.
“We have strengthened our capital structure by reducing leverage by repaying our Bitcoin-backed loan in full. We also continued to manage our balance sheet strategy by adding 7,500 BTC during the quarter,” MicroStrategy reported.
This success is partly due to Michael Saylor’s confidence in Bitcoin, and MicroStrategy is one of the few financial firms currently reporting a profit, while most of the competition falters in the face of inflation and recession. A recession may occur, lowering the outlook for investors.
- MicroStrategy Could Sell All Bitcoin Holdings to Pay Off Debt
- Bitfinex: Bitcoin price volatility will be small in the next few weeks
According to Cryptopotato