Bitcoin is still a long-term play for MicroStrategy's CEO in Q3 earnings

Key points:

MicroStrategy says it still holds 130,000 bitcoins at the end of the third quarter of 2022.
This amount represents 0.62% of all bitcoins ever owned, and the total cost is said to be around $4 billion, or $30,639 per bitcoin.
CEO says the company will continue to buy and hold Bitcoin for a long time.

MicroStrategy CEO says the company will continue to buy and hold Bitcoin for a long time despite its losses relative to previous earnings.

Business intelligence firm MicroStrategy continued to expand its bitcoin portfolio despite poor cryptocurrency market conditions, posting a net loss of $27.1 million for the quarter, according to business intelligence firm MicroStrategy’s third-quarter results.

The world's largest listed bitcoin owner has confirmed that it still holds 130,000 bitcoins at the end of the third quarter of 2022. This amount represents 0.62% of all bitcoins ever owned, and the total cost is said to be around $4 billion, or $30,639 per bitcoin.

The company reported on Nov. 1 that it had an impairment loss of $727,000 in the quarter, down from $917.8 million in the second quarter of 2022 or $65 million a year earlier, as bitcoin prices stabilized in the previous quarter.

Impairment, the accounting term the company uses to describe the reduction of its holdings, had a cumulative impairment loss of about $2 billion as of Sept. 30, according to MicroStrategy.

On a conference call MicroStrategy's president and CEO, Phong Le reiterated the company's long-term holding strategy, saying:

“We have not sold any Bitcoin to date. To reiterate our strategy, we seek to acquire and hold Bitcoin for the long term. And we do not currently plan to engage in sales of Bitcoin. We have a long-term time horizon and the core business is not impacted by the near-term Bitcoin price fluctuations.”

Michael Saylor, who stepped down as CEO on Aug. 8 but remains the company's executive chairman, mentioned on a conference call that the company's stock price has risen 116 percent since the start of its bitcoin strategy on Aug. 11, 2020. In contrast, Bitcoin has surged 72% over the same period.

In the accompanying earnings report, CFO Andrew Yang echoed the FASB's recent announcement to support "fair value accounting" for Bitcoin, stating:

“If finally adopted and implemented, we believe fair value accounting will improve upon the current, unfavorable intangible accounting treatment applicable to Bitcoin holdings and will promote additional institutional adoption of Bitcoin as an asset class”

MicroStrategy reported adjusted EPS of $0.96, compared with analysts' estimates of a loss of $0.94, on revenue of $125.4 million, beating estimates by just 0.05%.

The company's revenue in the first and second quarters of last year hit $119.3 million and $122.1 million, respectively. Subscription services accounted for $16.4 million of revenue in the third quarter, up 51% year-over-year and the fastest-growing revenue source for MicroStrategy.