MicroStrategy, a Bitcoin development company, announced its second-quarter financial report and continued to increase its purchases of Bitcoin. Its total Bitcoin holdings were 226,500, with an average cost of US$36,821 per Bitcoin and a total cost of US$8.34 billion. Unrealized profits amounted to $6.3 billion.
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ToggleIntroducing the "Bitcoin Yield" KPI indicator
Since the beginning of the second quarter, MicroStrategy has acquired 12,222 Bitcoins for $805 million, bringing its total Bitcoin holdings to 226,500, at an average cost of $36,821 per Bitcoin, and a total cost of $8.34 billion.
MicroStrategy has introduced a new key performance indicator "Bitcoin Yield" for its Bitcoin strategy. Its “Bitcoin rate of return” so far this year is 12.2%, and its goal for the next three years is to grow 4% to 8% annually.
Bitcoin Yield is the ratio of a microstrategy’s Bitcoin holdings to its diluted shares outstanding. Diluted shares outstanding include all actual shares of the Company's common stock and any additional shares resulting from the conversion of all convertible notes, the exercise of all stock options and the settlement of all restricted and performance stock units. This metric shows the company’s Bitcoin holdings compared to its underlying total number of shares.
The Company uses Bitcoin Returns as a key performance indicator to help evaluate the performance of its strategy of acquiring Bitcoin in a manner that the Company believes is beneficial to shareholders. MicroStrategy believes that this KPI can be used to supplement investors' understanding and decision-making of buying Bitcoin by issuing additional common shares or instruments convertible into common shares.
Software business suffered losses and Bitcoin was not recognized at fair value
MicroStrategy's software business is still in the red, with revenue down 7.5% year-on-year to US$111.1 million. Loss from operations amounted to US$18.7 million.
This micro-strategy still recognized digital asset impairments of up to US$181.5 million, and did not use fair value (Fair Value) to recognize the value of Bitcoin. Therefore, although Bitcoin has risen to 65K, the unrealized profit is as high as 6.3 billion. US dollars, but this was not reflected in MicroStrategy’s earnings report.
MicroStrategy Stocks Effective August 7
MicroStrategy's previously announced 10-for-1 stock split will take effect on August 7. Its shares are up 118% year to date.
