Business Intelligence Platform MicroStrategy Reaffirms Its Commitment to Bitcoin, Investing strategy after posting first quarterly profit since 2020. The company, founded by Michael Saylor, returned to profitability in the first quarter of 2023 with a profit of $94 million , largely thanks to a one- time income tax benefit of $453.2 million.
In addition to the tax benefits, the company cashed in $121.9 million in revenue, up 2.2% from a year earlier. MicroStrategy's “belief” in its Bitcoin was explained in a May 1 statement by the company's CEO, Phong Lee. The investment strategy is as "strong" as ever: "As the digital asset environment continues to mature, our belief in the Bitcoin strategy remains strong."
He added: "While we invest in growth while remaining tightly controlled on costs, we will continue to execute our dual strategy of growing our business intelligence software business and acquiring Bitcoin for the future."
Lee also emphasized that its “core business” is not affected by BTC's short-term price fluctuations. Saylor, who serves as chairman of MicroStrategy, attributed the quarter's success to the excellent execution of the company's core business model and its Bitcoin investment thesis, which he described as “the right strategy,” adding: “So in the end, it's not easy to see what might be a better strategy. So we're strong supporters of the Bitcoin strategy. As you can see from this chart, simply acquiring and Holding bitcoin is a great way to outperform the market."
Bitcoin advocates predict that investors will soon exit their crypto asset positions “under the microscope of the regulatory environment,” which in turn will “flow into Bitcoin.” Andrew Kang, MicroStrategy's chief financial officer, added that the company also man aged to reduce leverage by repaying a $161 million bitcoin-backed loan from the now-defunct Silverage Bank:
“By repaying the debt, we also freed up all the Bitcoin that was collateral for the loan. This is an important strategic transaction for us and our liability management objectives.” According to previous SEC filings, the business intelligence firm made two purchases of 7,500 BTC during the first quarter, on March 23 and April 5, for a total of $179 million. The company now holds 140,000 bitcoins, which cost an average of $29,803 to purchase.
The company started to turn around as bitcoin managed to rally 72% to about $28,300 in the first quarter. With BTC currently trading at $28,100, MicroStrategy's Bitcoin investment is down about 5.7%.
However, the company was in the “green” for a while last month when BTC surged to its latest high of $30,980 on April 15. The software analytics firm began investing its cash reserves in BTC on March 5, 2021, when it bought 91,064 BTC 65% of its total holdings today.
Saylor recently revealed that MicroStrategy integrated Bitcoin Lightning into his corporate email address. The bitcoin-savvy firm is also developing software-as-a-service tools for businesses based on bitcoin's layer 2 Lightning Network.
