MicroStrategy’s $425M Bitcoin Bet ‘Elevating Firm’s Profile,’ Say Executives

MicroStrategy executives said Tuesday its 38,250 bitcoin treasury is boosting the business intelligence company’s market visibility in Q3 as its revenue rose 6.4% year-over-year and notched a net loss of $14.2 million. On a non-GAAP basis, the company posted a profit of $19.8 million, or $2.06 per share, up from $11.6 million, or $1.13 a year ago.

“We’ve seen a notable and unexpected benefit from our investment in bitcoin in elevating the profile of the company in the broader market, said MicroStrategy President Phong Li. “This is benefitting our reputation overall, raising our mindshare among prospective customers.”

He also said more buying is on the way.

“You should expect that we will purchase additional bitcoin as we generate cash beyond what we need to run the business on a day to day basis,” Li said.

CEO Michael Saylor, who has vocally championed bitcoin since early September, further explained during the earnings call that MicroStrategy’s bitcoin reserves are paying dividends across recruiting, marketing and the MicroStrategy brand. He also compared the bitcoin network to “a digital monetary network that doesn’t bleed monetary energy.”

“As more entities start to understand that idea, which is pretty compelling, the adoption of bitcoin increases,” he said.

The executive’s statement caps a wild three months at the business intelligence firm, executives first hinted at a bitcoin future in their Q2 call. MSTR’s share has risen over 40% since Saylor’s first bitcoin disclosure on August 11. Its BTC is now worth $521 million, a 22% premium over the $425 million investment. 

For its part, MicroStrategy quoted its 38,250 bitcoins at $13,023 apiece at market close Monday afternoon. That would put the total trove around $498 million.

Price aside, the bitcoin storyline has definitely boosted the company’s profile. The shift began on July 28, when during the Q2 earnings call executives mulled allocating $250 million into “alternative assets” over the next 12 months as a hedge against the weakening dollar. 

Bitcoin, they said, was one of the possible “alternatives.” It turned out to be the only alternative. 

MicroStrategy bought $250 million in bitcoin on Aug. 11. It purchased an additional $175 million in bitcoin one month after that. Bitcointreasuries.org says the business intelligence firm now holds 38,250 BTC .182% of bitcoin’s total supply. 

All this from a company whose business model has nothing to do with crypto. Before bitcoin, MicroStrategy’s only interaction with the blockchain space was its $30 million sale of the Voice.com domain name to EOS in 2019. 

Saylor nevertheless framed the bitcoin holdings as an “example of MicroStrategy’s embrace of virtual technologies” in his Q3 earnings call preview.

With bitcoin now recognized as MicroStrategy’s “primary treasury reserve asset,” the firm said in its statement that it could raise or lower its total holdings as necessary.