Why MicroStrategy Stock Plummeted by Nearly 18% on Tuesday


MicroStrategy (NASDAQ: MSTR) had the misfortune to report its latest set of earnings at a time when its most important asset was on the decline.

MicroStrategy is a niche tech company that has almost entirely transformed itself into basically an institutional Bitcoin (CRYPTO: BTC) holder. It published first-quarter results at a time when the cryptocurrency was going through several days of declines. That, compounded with generally weak fundamentals, drove MicroStrategy’s share price down by almost 18% on Tuesday.

Bitcoin blues?

MicroStrategy proudly bills itself as the “largest corporate holder of Bitcoin,” which is fantastic when the leading crypto is on the rise, but not so impressive when it’s in the doldrums… like now.

That’s uncomfortable enough. But the numbers the company posted for the quarter were more uncomfortable. Revenue came in at just over $115 million, which was down from the first quarter 2023 result of nearly $122 million. It also didn’t meet the average analyst estimate of $121.7 million.

Non-GAAP (adjusted) net loss deepened considerably, landing in a vat of red ink to the tune of almost $186 million. In comparison, the year-ago shortfall of under $3 million was relatively painless.

Adding over 25,000 coins to the digital money pile

At least its Bitcoin pile is growing. MicroStrategy reported that its holdings in the coin now total 214,400, for which it paid $7.54 billion. This works out to $35,180 per Bitcoin. Of that tally, 25,250 Bitcoin were acquired during the quarter at an average price of $65,232. That’s higher than the current level, following the coin’s recent decline.

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Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

Why MicroStrategy Stock Plummeted by Nearly 18% on Tuesday was originally published by The Motley Fool

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