In Q3, MicroStrategy added about 9,000 Bitcoin to its portfolio, bringing its total BTC holdings to around $7 billion.
In its Q3 report on Oct. 28, the company highlighted the purchase of 8,957 BTC, with perma-bull CEO Michael Saylor predicting that there will be more BTC accumulation to come:
“Today, MicroStrategy is the world’s largest publicly traded corporate owner of Bitcoin with over 114,000 Bitcoins. We will continue to evaluate opportunities to raise additional capital to execute on our Bitcoin strategy.”
Since the same time last year, the software company has raised its Bitcoin holdings by 198 percent, and as of Sept. 30, the total stood at 114,042 BTC, with an estimated average purchase price of $27,713 per coin, or a total spend of $3.16 billion.
Microstrategy‘s BTC holdings have a carrying value of $2.406 billion, with an impairment loss of $754.7 million since the acquisition, but this is only a paper loss.
Because Bitcoin is classified as an “intangible asset,” accounting standards require the company to disclose an impairment loss if the carrying value falls below the cost basis. However, until a profit is realized through a sale, the firm is not obligated to record any paper gains on the asset.
Because BTC is currently trading at around $60,600, MicroStrategy’s assets are worth over $6.9 billion, implying a profit of nearly $3.75 billion if sold today.
MicroStrategy makes money by selling business intelligence software, mobile app software, and cloud-based solutions. The company makes money through product licensing and subscription services.
The company’s overall sales for the quarter was $128 million, topping the Zacks Consensus Estimate by 0.39 percent and representing a 0.5 percent rise over MicroStrategy’s Q3 performance from 2020.
While Micostrategy’s revenue exceeded expectations, the company’s earnings were $1.86 per share, compared to $1.12 per share expected. MicroStrategy has outperformed consensus predictions three times “over the last four quarters,” according to the financial research firm.
“This quarterly report represents an earnings surprise of 66.07%. A quarter ago, it was expected that this business software company would post earnings of $0.73 per share when it actually produced earnings of $1.72, delivering a surprise of 135.62%,” said Zacks Investment Research.
The firm’s good success in Q3 was attributed to “overall demand” for the MicroStrategy platform and increased adoption of the firm’s cloud-based solutions, according to Saylor.
The company reported a gross profit of $105.7 million for the quarter, which was the same as the previous year. In Q3 2020, the company lost $36.1 million, or $3.61 per share, compared to $14.2 million, or $1.48 per share, in the previous quarter.
Saylor retweeted his own post from October 2020, indicating personal holdings of 17,732 BTC, earlier today, reinforcing his bullishness for digital gold by declaring, “You do not sell your Bitcoin.”
