MicroStrategy says no plans to stop trading BTC as paper loss hits $1.3B

Software analytics company MicroStrategy recorded a paper loss of over a billion dollars on its Bitcoin (BTC) holdings in 2022 but says it has no plans to stop trading the digital asset.

MicroStrategy released its 2022 Q4 and year-end earnings on Feb. 2 showing the recorded impairment charges on its BTC holdings, net of gains on sale, was nearly $1.3 billion over the full year 2022.

Despite the paper losses, on a Feb. 2 earnings call MicroStrategy’s chief financial officer, Andrew Kang, said:

“We may consider pursuing additional transactions that may take advantage of the volatility in Bitcoin prices, or other market dislocations that are consistent with our long-term Bitcoin strategy.”

On the call, MicroStrategy co-founder Michael Saylor said the company measures its stock performance against “a number of different benchmarks” saying “the most important benchmark is Bitcoin’s performance.”

Saylor added since MicroStrategy first announced it was buying Bitcoin in Aug. 2020 its “been able to outperform Bitcoin as an index” over that time.

In its Q4 earnings presentation, the company shared its own analysis of its stock price performance compared to Bitcoin, indices and its competitors. Image: MicroStrategy

He said the company’s stock is up 117% since Aug. 2020 compared to Bitcoin’s gain of 98%, and added:

“The only real safe haven for an institutional investor is Bitcoin. Bitcoin is the only universally acknowledged digital commodity, and so if you're an investor, Bitcoin is your safe haven in this regard.”

Kang stated MicroStrategy held a total of 132,500 BTC worth $1.84 billion as of Dec. 31, 2022. 14,890 BTC were held directly by the business with the remaining held in its subsidiary MacroStrategy LLC.

Related: US institutions account for 85% of Bitcoin buying in ‘very positive sign’ — Matrixport

Late last year the company sold a portion of its Bitcoin holdings for the first time. Discussing the sale, Kang said the 704 BTC were sold to harvest a tax loss of around $34 million.

He added even with the sale, the company “increased our net holdings by 2500 Bitcoin during the quarter.”

MicroStrategy's overall revenue for the fourth quarter was $132.6 billion, reportedly beating Wall Street expectations. Its Q4 loss per share came in at $21.93.

At the time of writing, MicroStrategy’s stock price had fallen over 4% in after-hours trading according to Yahoo Finance data.

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