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In the Q2 results, the company has also introduced a new performance indicator dubbed “Bitcoin Yield” showing the percentage change over time in the ratio of the company’s Bitcoin holdings and its diluted outstanding shares.
MicroStrategy Inc (NASDAQ: MSTR), the world’s largest holder of Bitcoin, announced its Q2 results on Thursday, August 1, reporting a loss of $5.75 per share and a revenue of just $114 million, declining 7% year-over-year.
As a result, the MicroStrategy share price came crashing down dropping by over 6.3% on Thursday, and ending the trading session at 1,511.81. This sharp reaction in the share price came as the company’s losses exceeded analysts’ expectations which pegged a quarterly loss of $0.78 per share and $119.3 million in revenue.
The company’s net loss in Q2 stood at $123 million, with a slight improvement over the net loss of $137 million recorded in Q2 2023. Furthermore, MicroStrategy said that it currently holds a total of 226,500 BTC acquired at an average price of $36,821 per Bitcoin and $8.5 billion investment so far
During the second quarter, MicroStrategy acquired an additional 12,222 Bitcoins for $805 million, with the actual value of its total BTC holdings now standing at $14.7 billion as of the current prices.
In the Q2 results, the company has also introduced a new performance indicator dubbed “Bitcoin Yield” showing the percentage change over time in the ratio of the company’s Bitcoin holdings and its diluted outstanding shares. Diluted shares outstanding consider all of a company’s common stock, as well as any additional shares that could be generated through convertible notes or the exercise of stock options.
MicroStrategy said that its Bitcoin yield currently stands at 12.2% year-to-date. the company added that it is targeting a yield of anywhere between 4-8% annually over the next three years. “The Company uses BTC Yield as a KPI to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders,” said MicroStrategy.
MSTR Stock Split and Additional Bitcoin Purchases
After its announcement last month on July 11, MicroStrategy said that it would proceed with the plan of the MSTR stock split in a 10:1 ratio, going forward effective August 7.
Besides, the company is further willing to continue with its Bitcoin acquisition strategy and plans to raise an additional $2 billion through an at-the-market equity offering.
While the MSTR stock outperformed Bitcoin gains since January 2023, market analysts are putting key focus on the company’s underlying software business. Although MicroStrategy’s Bitcoin holdings have soared to nearly $15 billion over recent years, making it the largest corporate holder of the digital asset, its software business revenue has remained stagnant.
“For me, I think the big question is just making sure that their cash flows are going to be sufficient to cover the incremental interest expense associated with the convertible debt they’ve issued. If my estimates are right, they don’t have a lot of room for error if their software business underperforms,” Lance Vitanza, an analyst at TD Cowen, told Bloomberg.
