The business also lost $34 million on its first-ever Bitcoin sale last quarter, but maintained it was done to take advantage of a tax break.
MicroStrategy, a software analytics business, reported a paper loss of more than a billion dollars on its Bitcoin holdings in 2022, but claims it has no intentions to cease trading the digital commodity.
On Feb. 2, MicroStrategy disclosed its 2022 fourth-quarter and year-end profits, revealing that the reported impairment charges on its BTC holdings, net of gains on sale, were over $1.3 billion for the whole year 2022.
Despite the paper losses, MicroStrategy’s chief financial officer, Andrew Kang, stated on a Feb. 2 earnings call:
“We may consider pursuing additional transactions that may take advantage of the volatility in Bitcoin prices, or other market dislocations that are consistent with our long-term Bitcoin strategy.”
MicroStrategy co-founder Michael Saylor stated on the call that the firm analyses its stock performance against “a variety of different benchmarks,” with “the most important comparison being Bitcoin’s success.”
Saylor went on to say that MicroStrategy had “been able to beat Bitcoin as an index” when it first revealed it was buying Bitcoin in August 2020.
He stated that the company’s stock had increased 117% since August 2020, compared to Bitcoin’s 98% increase, and added:
“The only real safe haven for an institutional investor is Bitcoin. Bitcoin is the only universally acknowledged digital commodity, and so if you’re an investor, Bitcoin is your safe haven in this regard.”
Kang indicated that as of December 31, 2022, MicroStrategy has 132,500 BTC worth $1.84 billion. The company possessed 14,890 BTC directly, with the remainder held through its subsidiary MacroStrategy LLC.
For the first time, the corporation sold a chunk of its Bitcoin assets late last year. Kang stated that the 704 BTC were sold to generate a tax loss of around $34 million.
Despite the transaction, the business “raised our net holdings by 2500 Bitcoin over the quarter,” he said.
MicroStrategy’s total revenue for the fourth quarter was estimated to be $132.6 billion, above Wall Street projections. Its loss per share in the fourth quarter was $21.93.
According to Yahoo Finance statistics, MicroStrategy’s stock price had dropped more than 4% in after-hours trading at the time of writing.