MicroStrategy, a software analytics company, reported a paper loss of $1.3 billion on its bitcoin (BTC) holdings in 2022. However, it stated that it would continue to trade digital assets.
MicroStrategy Q4 2022 Impairment Charges
During a fourth-quarter 2022 and year-end earnings call, Chief Financial Officer Andrew Kang indicated that the losses do not affect the company’s commitment to bitcoin. Despite recording nearly $1.3 billion of impairment charges on its BTC holdings in 2022, MicroStrategy CFO Andrew Kang stated in a recent earnings call that the company remains bullish on its cryptocurrency investments.
MicroStrategy outperforms Bitcoin
MicroStrategy co-founder Michael Saylor stated in a call that the company uses multiple benchmarks to assess the performance of its stocks, with Bitcoin being the most significant. He further mentioned that since MicroStrategy announced its bitcoin purchases in August 2020, the company has consistently outperformed bitcoin as an index.
According to Michael Saylor, MicroStrategy shares are up 117% since August 2020, while Bitcoin has seen a 98% gain. He stressed that the only safe option for institutional investors is bitcoin, the only universally recognized digital commodity.
As of December 31, 2022, MicroStrategy had a total of 132,500 BTC valued at $1.84 billion. Of this, 14,890 BTC was owned by the company, with the remainder held by its subsidiary MacroStrategy LLC.
Bitcoin Harvest Tax Loss Sale
The company recently decided to sell some of its bitcoin for the first time. The boss, Kang, explained that they did this to take advantage of the opportunity to save about $34 million in taxes.
Even though they sold 704 BTC, they managed to increase their total bitcoin collection by earning another 2,500 BTC during that quarter. That shows that the company is really interested in investing in the world of cryptocurrencies and they know how to make the most of it. MicroStrategy had an incredible fourth quarter, generating $132.6 billion in revenue and exceeding what people on Wall Street thought it would earn.
Even though they lost $21.93 per share, their strong performance still drove their share price down 4% in after-hours trading. These results show that MicroStrategy is still doing well financially and can stay ahead.
