Enterprise analytics agency MicroStrategy, which owns extra bitcoin than every other company on this planet, posted its largest loss ever Thursday on account of the cryptocurrency’s large crash final quarter, however the firm’s longtime CEO Michael Saylor stated the corporate will persevering with shopping for extra of the risky asset amid robust assist from institutional traders.
In an after-market release Thursday, Virginia-based MicroStrategy reported a second-quarter lack of $299.3 million, in comparison with a $3 million revenue in final yr’s second quarter, on roughly $125 million in gross sales, up 13.4% from a yr earlier.
Fueling its total losses, the corporate disclosed a $424.8 million impairment loss because of the declining worth of its bitcoin holdings within the quarter, throughout which the cryptocurrency’s costs plummeted 40%.
The impairment loss displays a decline in bitcoin’s carrying worth, however it might successfully be recouped if costs get well—not out of the query given the coin’s volatility and previous resurgence.
In a press release alongside earnings, Saylor touted the corporate’s profitable debt providing in June, after which the agency bought an extra 13,005 bitcoins for $489 million in money.
As of June 30, MicroStrategy owns about 105,085 bitcoins, value practically $4.2 billion based mostly on Thursday costs of about $39,760.
Final month, MicroStrategy raised a greater-than-expected $500 million by means of the sale of bonds with the intention to purchase extra of the world’s largest cryptocurrency. In an indication of large curiosity from institutional traders, the corporate received greater than $1.5 billion in orders for the providing, which was introduced whereas bitcoin costs had been at a one-month low of about $33,400.
“We proceed to be happy by the outcomes of the implementation of our digital asset technique,” Saylor stated Thursday, noting the corporate’s newest capital increase and including: “Going ahead, we intend to proceed to deploy extra capital into our digital asset technique.”
Given its outsized crypto funding, MicroStrategy’s inventory tends to experience bitcoin’s extremely risky worth wave. Shares have plunged greater than 50% since February, when bitcoin sank after Tesla CEO Elon Musk, a vocal crypto supporter who’s fueled volatility within the house this yr, said costs appeared “slightly excessive.” The cryptocurrency is down about 30% over the identical interval, however like MicroStrategy, whose inventory has skyrocketed 410%, its costs have surged 260% over the previous yr. MicroStrategy’s second-quarter loss is its biggest because the dot-com period in 2000, when the data-mining firm posted a third-quarter lack of $168 million. That yr, the inventory soared practically 2,500% earlier than plunging greater than 95% when the broader market crashed.
MicroStrategy owns extra bitcoin than any publicly traded firm, however in its namesake bitcoin fund, funding supervisor Grayscale owns 654,885 tokens—value greater than $26 billion on Thursday.