Despite loses, billionaire Michael Saylor supports Bitcoin
During times of excitement and hardship, Michael Saylor is an advocate for bitcoin.
The billionaire is still going to believe in and bet on the king of cryptocurrencies, so he is still going to do that.
There have been some setbacks for bitcoin since the end of 2021. Even the most steadfast bitcoin supporters had a little doubt after seeing how things had gone down since then.
It has gone from $69,044.77 on Nov. 10 to $39,828.16 now. There is a lot less worth in Bitcoin now, so it has lost a lot of its value.
This has just been shown in the first quarter results of MicroStrategy (MSTR) – Get MicroStrategy Incorporated Class A Report, which is owned by Michael Saylor. The company has had bitcoin on its balance sheet since 2020.
2.92 percent less money was made by MicroStrategy in the first three months of this year than in the first three months of 2019.
Because of its bitcoin strategy in the third quarter of 2020, MicroStrategy hasn’t made as much money as it did before.
People made $110.6 million in the second quarter of 2020. Three months later, they made $127.4 million, which is a lot more money.
In a statement, the company says it lost $130.8 million in the first three months of this year, compared to $110 million in the same period in 2021.
These results were hurt by a $170.1 million write-down, the company said.
Bitcoin prices have changed, so MicroStrategy had to lower the value of its bitcoins to better reflect this.
There were 4,827 bitcoins that MicroStrategy bought for $215 million in the first three months of the year at an average price of $44,645, the company says.
In March 2022, the company owns 129,218 bitcoins with a value of $5.9 billion, which “reflects $1.9 billion of unrealized gains or nearly 50% appreciation when compared to the original cost basis of our bitcoin.”
MicroStrategy, on the other hand, says it has taken a total loss of $1.1 billion because of its bitcoins.
She stays for the long haul.
Despite this, Saylor and MicroStrategy have no plans to sell their bitcoin and still believe in their strategy.
President and CEO Phong Le said during the earnings call that the company wants to buy and hold Bitcoin for the long term. The way we look at our bitcoin holdings is that they are long-term holdings, and we don’t plan to sell them right now.
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For the growing digital currency industry, that is a company that provides solutions and services for the financial infrastructure of the industry.
For three years, “we got $205 million in an interest-only loan,” Lee said during the earnings call. The loan is backed by bitcoin, which is why it’s interest-only. The loan is due on March 23, 2025.
More loans backed by Bitcoin?
That’s what MicroStrategy said. This loan is not backed by anyone.
About 14,100 of its 129,218 bitcoins are held by the MicroStrategy entity. All of them are used as collateral to secure the company’s 2028 secured notes, it said.
The CFO said that the MicroStrategy subsidiary has the rest of the Bitcoins.
About 19,500 bitcoins of the MicroStrategy are being used as collateral for a bitcoin back term loan, and there are more than 95,600 bitcoins that are not.
MicroStrategy also said that it might look into other ways to use its bitcoins in the future.
“For example, if the market is right, we may do more bitcoin back financings,” Le said to analysts. “We want to lend our bitcoin to other people to make money.”
In the future, “We will keep an eye on the market to see if we should do any of these things, and we may not do any of them at all.”