MicroStrategy Posts Q1 Profit With Bitcoin: MSTR Up 120%

Lavina Daryanani
Source: IntoTheBlock/Medium

On Monday, May 1, MicroStrategy announced the financial results for the first quarter of 2023. The Business Intelligence platform registered a gross profit of $94 million. On the other hand, its net income figure stood at $461 million, or $31.79 per share.

The rise in Bitcoin’s value allowed MicroStrategy to slash down a particular reserve. The same helped the company reap a one-time tax benefit of $453.2 million. In fact, the company also noted its first quarterly profit since 2020, on its Bitcoin holdings.

Parallelly, MicroStrategy’s write-down related to its Bitcoin holdings also registered a significant drop compared to last quarter. According to the official statement, the company’s impairment loss was $18.9 million for the first quarter. For context, Q4 2022’s loss reflected a value of $197.6 million, while MicroStrategy’s impairment loss a year earlier, stood at $170.1 million. In effect, the company intends to remain committed to Bitcoin. MicroStrategy’s Chief Financial Officer, Andrew Kang, said in the statement,

“The conviction in our bitcoin strategy remains strong as the digital asset environment continues to mature.”

Also Read: Bitcoin Fraud Case: CFTC Pockets Record $3.4 Billion Judgement

In the quarter, the company bought a total of 7,500 BTC this quarter, bringing the total number of coins held to 140,000. In fact, the company also managed to reduce leverage by fully re-paying its Bitcoin-backed loan, strengthening its capital structure.

MSTR outperforms Bitcoin, other stocks

Alongside Bitcoin’s rally, MicroStrategy’s share price has been rising parallelly. MSRT is up by around 120% this year, while BTC has risen by about 70% so far in 2023.

Also Read: Crypto x Stocks: Is Un-Correlation in Play?

Michael Saylor began buying Bitcoin in 2020, to reduce the company’s cash holdings. Via a recent tweet, the MicroStrategy executive went on to highlight how MSTR remains to be the top performer when compared to key assets and indices like gold, silver, bonds, S&P 500, and Nasdaq. In fact, it is also ahead in the race when compared to big tech stocks and enterprise software stocks like Apple, Google, Microsoft, Meta, Netflix, Amazon, Oracle, IBM, Salesforce, SAP, etc.

Also Read – Bitcoin’s Energy Use is a ‘Skyscraper’, Ethereum a ‘Raspberry’: Research