MicroStrategy has already lost nearly $150 million this quarter largely because bitcoin’s price has dipped so much.
MicroStrategy Stock Has Fallen Due to BTC
It wouldn’t matter if bitcoin fell on its own. The problem is that the company has invested in the digital asset so much that stock shares are practically tied to the digital currency, and thus when BTC falls, the company is likely to fall with it.
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Chief financial officer Phong Le explained in an interview that the firm is looking to make bitcoin its primary reserve asset. It’s not relying on gold or USD. Rather, it’s going to invest primarily in the currency because it believes in it so much. Despite the recent losses, MicroStrategy will continue its present agenda. He says:
We believe that such market attention, when captured correctly, has helped to create software pipeline growth and sales growth.
Late last week, the software giant reported a stock dip of more than five percent. Over the past three months, stock in the company has fallen by more than 55 percent. This makes sense considering this is ultimately when bitcoin began incurring its many dips. The asset initially reached $68,000 in November of 2021, the highest it’s ever been. It has been stumbling along the way since then and has dropped by more than $30,000 at press time.
At the time of writing, MicroStrategy is believed to own around 125,000 bitcoin units. These assets were initially worth nearly $4 billion, though due to the recent dips, the stash has fallen to a price of less than $3 billion. Le commented:
We will recognize significant impairment charges again in the first quarter.
CEO Michael Saylor isn’t letting the news bring him down. He was quick to add his two cents about the situation, mentioning:
If you compare us to various spot and futures ETFs, I think we compare very favorably because we are an efficient operating company.
He further stated that MicroStrategy has not lost its value, and that investors should still take it seriously if they’re looking to diversify their stock portfolios. He said:
When you’re considering MicroStrategy, clearly you can look at us as a software company, and I think people are going to evaluate our revenue growth rate. They’re going to look at our ability to generate free cash flow, our efficiency.
How Can BTC Make Life Better?
Saylor says he is still considering how he can use the company’s BTC stash to benefit investors. He says:
We haven’t really decided on anything, and we don’t have any particular intent right now, but the option to pursue either leverage or yield or other kinds of strategic partnerships using our billions of dollars of bitcoin, I think, is very important… It’s an important benefit to our shareholders, and it’s a way in which we will look to build shareholder value.