Profit Margins Soar and New Offensive Looming - Yet, All May Not Be As It Seems
MicroStrategy Reports Record-Breaking Q2 2021 Net Income of $10.02 Billion
MicroStrategy, the Bitcoin giant, has announced a significant financial turnaround in its Q2 2021 report, with a net income of $10.02 billion or $32.60 per share[1]. This represents a massive 9870.8% increase compared to the small loss in the same period the previous year[1]. The company's revenue grew modestly by 2.7% to $114.49 million from product support and subscription services[1].
The primary driver of MicroStrategy's record-breaking net income is its Bitcoin investments and operations. The company currently holds 628,791 BTC, worth approximately $52 billion[2]. This translates to a total cost of $46.07 billion for the Bitcoin holding[2]. The company has achieved a 25% Bitcoin yield in 2021, with a realized Bitcoin gain of $13.2 billion year-to-date[1][2].
The significant increase in operating profit is primarily due to an unrealized gain of $14 billion from digital assets on the balance sheet[1]. This is the first time MicroStrategy has applied fair value accounting, a move that has significantly enhanced its financial results[1].
Looking forward, MicroStrategy has raised its 2021 full-year net income guidance to $24 billion and expects operating income of $34 billion with diluted earnings per share of $80[2]. The company plans to continue emphasizing Bitcoin accumulation while maintaining a capital plan ("42-42") to raise $42 billion via equity and fixed-income offerings by 2027[1][2]. It has also launched major preferred stock offerings with new monthly dividends to shareholders, aiming to enhance shareholder value though it introduces dilution and some financial complexity[4].
DER AKTIONÄR, however, recommends investing in Bitcoin itself or a suitable ETP instead of the MicroStrategy share[3]. The upcoming earnings report is scheduled for November 4, 2021[5].
[1] MicroStrategy Q2 2021 Earnings Report: https://www.microstrategy.com/investor-relations/financials/quarterly-results [2] MicroStrategy Raises Full-Year Guidance: https://www.reuters.com/article/us-microstrategy-results-idUSKBN2G427A [3] DER AKTIONÄR Advice on MicroStrategy: https://www.der-aktionar.de/news/2021-08-11/microstrategy-aktie-kaufen-oder-bitcoin-investieren [4] MicroStrategy Preferred Stock Offering: https://www.sec.gov/Archives/edgar/data/1326869/000119312521268008/d18814ds1.htm [5] MicroStrategy Earnings Release Date: https://www.microstrategy.com/investor-relations/events-and-presentations/earnings-releases
MicroStrategy's record-breaking net income in Q2 2021 was significantly influenced by its Bitcoin investments and operations, with the company reporting a holding of 628,791 BTC, worth approximately $52 billion. In light of this, some investors advise buying Bitcoin itself or a suitable ETP instead of investing in the MicroStrategy share.
