MicroStrategy buys $25 million more in Bitcoin despite Q4 2021 loss

MicroStrategy has doubled down on its Bitcoin holdings and accumulated an additional 660 Bitcoin at $25 million. MicroStrategy CEO Michael J. Saylor announced his purchase on Tuesday.

MicroStrategy has purchased an additional 660 bitcoins for ~$25.0 million in cash at an average price of ~$37,865 per #bitcoin. As of 1/31/22 we #hodl ~125,051 bitcoins acquired for ~$3.78 billion at an average price of ~$30,200 per bitcoin. $MSTRhttps://t.co/bF6VImC0Qy

— Michael Saylor⚡️ (@saylor) February 1, 2022

Despite Bitcoin’s value falling nearly 45% from its all-time high in November last year, MicroStrategy is still 21% in profit from all their Bitcoin purchases. However, the company reported a $146 million loss in impairment charges due to Bitcoin’s recent decline in value. Despite this decline in value, the company’s CEO Saylor has said that MicroStrategy will never sell, even in the face of an extensive crypto bear market. The firm has lost $901 million in impairment charges on its BTC holdings over the last six quarters. 

In the third quarter of 2021, the company added almost 9,000 bitcoin to its holdings, an average of 3,000 a month after an explosive bull market made its value skyrocket. 

MicroStrategy saw its stocks rise 900% in a few months in early 2021. However, its stocks have since declined by over 66%. Moreover, this decline caused the latest purchase to be smaller than the previous purchases of Bitcoin.

MicroStrategy was also the first publicly held company to own Bitcoin. MicroStrategy announced its first Bitcoin purchase in August of 2021 when it purchased 21,454 Bitcoin. The company has since accumulated over 125,051 Bitcoin within two years. 

However, MicroStrategy recently had a dispute with the Securities and Exchange Commission (SEC) of the United States when MicroStrategy added a “Non-GAAP Financial measures” section to Form 10-Q (Quarterly financial report public companies file with the SEC) for the quarter ended September 20, 2021, because the Generally Accepted Accounting Principles (GAAP) standard does not accurately value digital currencies and can negatively impact a company’s net income. However, SEC objected to MicroStrategy’s Reconciliation of the non-GAAP net income schedule and sent a letter to the company, advising the company to remove it.

MicroStrategy is expected to continue its Bitcoin accumulation despite its controversy with the SEC and short-term losses, consistent with the recent statements by its CEO.