Saylor’s MicroStrategy Posts Loss After Writing Down Bitcoin Holdings

(Bloomberg) — MicroStrategy Inc., the enterprise-software maker that is the largest publicly-traded holder of Bitcoin, posted a third-quarter loss after taking a writedown because of a decline in the value of the cryptocurrency.

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The Tysons Corner, Virginia-based company’s net loss widened to $143.4 million, or $10.09 a share, from $27 million, or $2.39, in the year-ago period. Revenue from the software business rose about 3% to $129.5 million, above the average forecast of $125.8 million of analysts surveyed by Bloomberg.

MicroStrategy, which has been buying Bitcoin in bulk since 2020 as a hedge against inflation, has been forced to take massive writedowns over the years following downturns in the volatile digital currency. Bitcoin has increased about 30% since falling 11% in the three months ended Sept. 30.

Co-founder Michael Saylor has turned the once struggling software company into a Bitcoin proxy for equity investors by accumulating more than $5.5 billion of the cryptocurrency. Saylor gave up his chief executive officer title last year, saying he would focus on the Bitcoin aspect of the company’s dual strategy.

The $33.6 million impairment loss for the quarter brings the cumulative total to over $2.2 billion, meaning the company has written off almost half the Bitcoin purchases it has made, according to Bloomberg calculations. MicroStrategy as of Oct. 31 held more than 158,000 Bitcoin at a total cost of $4.69 billion, or $29,586 each, according to a statement.

In a post-earnings conference call, Chief Financial Officer Andrew Kang said the company plans to purchase more Bitcoin.

Investors and analysts are beginning to debate whether MicroStrategy’s shares will continue to command a Bitcoin-related premium, given that the US Securities and Exchange Commission seems likely to approve ETFs that invest directly in Bitcoin after a key court loss earlier this year.

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Since the middle of 2020, MicroStrategy shares have more…