Virginia-Based Company MicroStrategy Doubles Down on Bitcoin

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MicroStrategy, the Virginia-based company run by famous Bitcoin bull Michael Saylor, has always been committed to Bitcoin. The company has bought BTC at every turn, not being fazed by the low price at all. During last week’s $500 billion crash, for example, Saylor bought $25 million in Bitcoin.

To make matters more surprising, he bought the new BTC stash in a time where the SEC is putting pressure on the company over its operating profits. MicroStrategy owns more Bitcoins than any other corporation in the world, and this December, its purse just got thicker.

A Growing Bitcoin Investment

MicroStrategy’s strategy has resulted in a 180 turnaround for the company since the dot-com bubble burst a few decades ago. The company’s shares have gone up 200% since it started buying Bitcoin a couple of years ago to balance the books. The SEC’s scrutiny doesn’t help the company’s public image, but still, Saylor isn’t fazed by it. He’s also not fazed by Bitcoin’s volatility, continuing to invest in the leading cryptocurrency every time the price drops.

At the moment, MicroStrategy has the most coins out of every corporation. Its only close rival is Tesla with 42,000 coins. Even after reporting accounting losses due to the recent market crashes and the low Bitcoin price, the company hasn’t backed down from buying more BTC. It follows the example of Tesla and Square, the company led by ex-Twitter CEO Jack Dorsey, who have also reported massive accounting losses.

In October 2021, MicroStrategy posted a $36.1 million loss for the third quarter. It reported that it would have made up to $30 million if it excluded the accounting losses. These have totaled $65 million, and the SEC objected it. It sent a letter to the company asking it to remove adjustments from future filings, and two weeks later, the company said it’ll comply.

The company started buying Bitcoin to balance the books in August 2020. It now holds over 125,000 Bitcoins that is has purchased for a price of nearly $3.8 billion. That’s just over $30,000 per coin, adjusted per the volatile market. All those Bitcoins were funded by using debt and proceeds from a $1 billion stock offering disclosed in June. MicroStrategy’s shares have jumped up by 4% after the latest Bitcoin buy, but they’re down 30% this year in the midst of a market rout that fueled Bitcoin’s price drop.

Seizing the Opportunity

Michael Saylor is well-versed in the crypto market and he obviously knows what he’s doing. The latest MicroStrategy Bitcoin investment comes during a time when the market can’t recover its losses for nearly 2 months. Still, MicroStrategy sticks to Bitcoin even in the worst times, and that’s been the case now as well.

In the wake of the SEC’s comments and a time when the company’s losing profit, it still stuck to BTC. One of two things will happen now. Either its stubbornness will spell MicroStrategy’s doom, or it’ll post profits by the end of the year when crypto prices go up. Experts believe it’s the latter, but it remains to be seen.

February 2, 2022: • No Comments

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