A well-known platform Microstrategy plans to purchase more Bitcoins despite the loss in Q2, 2021. The company now holds about 105K Bitcoins in their balance sheet which is worth $2.051 billion. A doubt may arise where the firm has faced loss. Well, they are paper loss and not a real one.
According to the company’s recent financial results, Microstrategy aims to continue its Bitcoin purchase even after impairment loss. The best part is that companies do not need to report profits until they sell, but they can report losses on a cost basis.
Moreover, Microstrategy CEO, Michael Saylor stated:
“We are still pleased with the results of our digital asset strategy implementation. We intend to continue putting money into our digital asset strategy.”
Financial State of Microstrategy
According to the reports of financial results, the total revenue was $125.4 million for the second quarter of the year 2021. Besides, the profit for the second quarter of 2021 was $102.3 million whereas the loss was $299.3 million or $30.71 per share on a diluted basis.
Significantly, MicroStrategy’s digital assets including 105K bitcoins, had a carrying value of $2.051 billion as of June 30, 2021. This illustrates cumulative impairment losses of $689.6 million since purchase and an average carrying amount per bitcoin of approximately $19,518.
However, Microstrategy is strong to spend on Bitcoin despite the loss which seems a bold move. The company’s share price has also dropped significantly since last year when it began purchasing Bitcoins. Besides, Saylor stated that if Bitcoin’s price is lower in four years than the current price, he will change his strategy.
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