MicroStrategy (NASDAQ: MSTR) faced unfortunate timing with its latest earnings release coinciding with a downturn in its most significant asset.
As a niche tech company largely reliant on Bitcoin (CRYPTO: BTC) holdings, MicroStrategy’s first-quarter results came amidst a period of decline in the cryptocurrency. This, coupled with underlying weak fundamentals, contributed to a nearly 18% drop in MicroStrategy’s stock price on Tuesday.
Bitcoin blues?
MicroStrategy proudly brands itself as the “largest corporate holder of Bitcoin,” which is certainly a boastful claim during bullish periods for the leading cryptocurrency. However, this distinction loses its luster when Bitcoin is in a slump, as it is currently.
The discomfort doesn’t end there. MicroStrategy’s quarterly numbers paint an even more challenging picture. Revenue barely surpassed $115 million, a decline from the first quarter of 2023, which saw figures nearing $122 million. Furthermore, it fell short of the average analyst estimate of $121.7 million.
The company’s non-GAAP (adjusted) net loss took a significant turn for the worse, plunging into a substantial deficit of almost $186 million. This is in stark contrast to the relatively modest shortfall of under $3 million recorded a year ago.
Adding over 25,000 coins to the digital money pile
One silver lining for MicroStrategy is the growth of its Bitcoin reserves. The company disclosed that its holdings now stand at 214,400 bitcoins, acquired for a total of $7.54 billion. This translates to an average cost of $35,180 per Bitcoin.
During the quarter, MicroStrategy added 25,250 bitcoins to its stash, purchasing them at an average price of $65,232 per Bitcoin. This acquisition cost exceeds the current value, reflecting the recent decline in Bitcoin’s price.
