Michael Saylor’s strategy unrealized earnings of $14.05 billion in the second quarter The price of Bitcoin and recent accounting changes.
The company said in the SEC on Monday that unrealized gains were offset by related deferred taxes and $4.04 billion in taxes. This is the first week since the company formerly known as Microstrategy Inc. has not purchased other tokens since April. The strategy has about $65 billion in Bitcoin, making it the largest corporate holder of cryptocurrencies.
Saylor transforms once troubled enterprise software manufacturers into leading leveraged bitcoin agents by selling common shares and preferred shares and debt. On Monday, it also announced an additional marketing plan for the third round of preferred stocks that began selling earlier this year to help fund Bitcoin purchases. The strategy received about $6.8 billion in bitcoin in the three months ended June 30.
Although the strategy’s quarterly results may put it in a selected group Amazon Inc. and JPMorgan Chase According to analysts at Bloomberg News, its operating profit is expected to exceed $10 billion in the last quarter, and the company is expected to publish only about $112.8 million in revenue from its software business. The company is expected to release second-quarter results in August.
Since Saylor started buying Bitcoin in mid-2020, the strategy’s stock has soared more than 3,300% to fight inflation. During the same period, Bitcoin grew by about 1,000%, while the S&P 500 grew by about 115%. Stocks rose 40% in the second quarter as S&P grew 11%.
In the first quarter, the strategy adopted accounting changes that required the company’s Bitcoin to be evaluated at market prices. Strategy and Bitcoin’s corporate buyers are now recognizing unrealized changes that often generate a significant amount of revenue. The strategy posted a record $4.2 billion loss in the first quarter, with Bitcoin slumping by 12%.
Prior to the accounting change, the strategy had classified its Bitcoin holdings similar to intangible assets such as patents or trademarks. When the price of Bitcoin falls below the previous carrier value, this designation forces the strategy to permanently reduce its holding value. Only by selling the token can you recognize the gain.
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