Despite $27M Loss, MicroStrategy Records Improved Q3 As Bitcoin Holds Steady

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Despite post­ing a net loss for the third quar­ter, MicroS­trat­e­gy booked a dra­mat­ic improve­ment from the pre­ced­ing three months amid mut­ed bit­coin volatility. 

MicroS­trat­e­gy exec­u­tives said dur­ing an earn­ings call Tues­day that the firm plans to con­tin­ue buy­ing and hold­ing bit­coin, with no plans to sell. 

The Vir­ginia-based busi­ness intel­li­gence firm report­ed a net loss of $27 mil­lion in the third quar­ter — a dras­tic improve­ment from its $1.1 bil­lion net loss in the pri­or three-month period. 

MicroStrategy’s dig­i­tal asset impair­ment charges — which comes into play if the mar­ket val­ue of bit­coin decreas­es below the mar­ket-adjust­ed pur­chase val­ue of the firm’s  — were $700,000 dur­ing the third quar­ter, com­pared to $918 mil­lion in the second. 

The company’s stock was up 5.8% in ear­ly after-hours trad­ing in New York. MicroS­trat­e­gy is down rough­ly 54% on the year.

The largest pub­licly trad­ed cor­po­rate own­er of bit­coin (BTC), MicroS­trat­e­gy holds 130,000 bit­coins after buy­ing 301 BTC dur­ing the third quar­ter. The val­ue of those bit­coin hold­ings, as of Sept. 30, was near­ly $2 bil­lion, reflect­ing cumu­la­tive impair­ment loss­es of about $2 bil­lion since their purchase.

“In terms of a poten­tial, more severe macro down­turn, I think we do not have any plans to adjust our bit­coin strat­e­gy,” Chief Finan­cial Offi­cer Andrew Kang said on the earn­ings call. “We do, as we always have, view our invest­ment as a long-term view, impor­tant­ly through cycles…and we will con­tin­ue to believe in that core principle.”

MicroS­trat­e­gy Exec­u­tive Chair Michael Say­lor said bit­coin volatil­i­ty has improved in recent months. The asset’s volatil­i­ty dipped below that of the Nas­daq and the S&P 500 equi­ty index­es for the first time since 2020, accord­ing to Kaiko data.

“That’s real­ly bull­ish for the asset class, and aus­pi­cious,” Say­lor said.

Firm execs don’t address alleged tax evasion 

The third quar­ter results come as MicroS­trat­e­gy and Michael Say­lor are defen­dants in a law­suit launched by the attor­ney gen­er­al for Wash­ing­ton, DC.

Attor­ney Gen­er­al Karl Racine alleged in Sep­tem­ber that Say­lor per­son­al­ly ille­gal­ly avoid­ed more than $25 mil­lion of DC tax­es over about a decade by claim­ing to be a res­i­dent of oth­er juris­dic­tions, includ­ing Flori­da. Racine also alleged that MicroS­trat­e­gy con­spired in the tax evasion.

Dou­glas Gansler, a part­ner at Cad­walad­er, Wick­er­sham & Taft — the law firm whistle­blow­ers first came to — told Block­works the dam­ages could total rough­ly $165 million.

Say­lor, in a state­ment sent to Vir­ginia Busi­ness in Sep­tem­ber, said he “respect­ful­ly dis­agrees” with the tax fraud alle­ga­tions, while MicroS­trat­e­gy said in a state­ment that the claims against the com­pa­ny are “false.” Eugene Scalia, a part­ner in the DC office of Gib­son, Dunn & Crutch­er and for­mer US sec­re­tary of labor, was set to rep­re­sent Say­lor in the suit.

Com­pa­ny exec­u­tives did not com­ment on the law­suit dur­ing the call. 


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  • Ben Strack
    Ben Strack is a Den­ver-based reporter cov­er­ing macro and cryp­to-native funds, finan­cial advi­sors, struc­tured prod­ucts, and the inte­gra­tion of dig­i­tal assets and decen­tral­ized finance (DeFi) into tra­di­tion­al finance. Pri­or to join­ing Block­works, he cov­ered the asset man­age­ment indus­try for Fund Intel­li­gence and was a reporter and edi­tor for var­i­ous local news­pa­pers on Long Island. He grad­u­at­ed from the Uni­ver­si­ty of Mary­land with a degree in journalism.

    Con­tact Ben via email at [email pro­tect­ed]

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