Microstrategy (NASDAQ:MSTR) had the misfortune of announcing its latest earnings at a time when its most important asset was in decline.
MicroStrategy is a niche technology company that has almost completely transformed itself into an institutional company Bitcoin (CRYPTO:BTC) Holder. It reported first-quarter results at a time when the cryptocurrency was on the rise several Days of decline. That, combined with generally weak fundamentals, caused MicroStrategy’s share price to fall nearly 18% on Tuesday.
Bitcoin blues?
MicroStrategy proudly bills itself as “Bitcoin’s largest business owner,” which is fantastic when the leading cryptocurrency is on the rise, but not so impressive when it’s in the doldrums… like now.
That’s unpleasant enough. However, the numbers the company released for the quarter were more uncomfortable. Revenue was just over $115 million, below Q1 2023 earnings of nearly $122 million. Additionally, the average analyst estimate of $121.7 million was missed.
Non-GAAP (adjusted) net loss widened significantly, ending up in a pool of red ink of nearly $186 million. By comparison, last year’s shortfall of less than $3 million was relatively benign.
Adding over 25,000 coins to the digital money stack
At least his Bitcoin stack is growing. MicroStrategy reported that its holdings of the coin now total 214,400 and it paid $7.54 billion for it. This equates to $35,180 per Bitcoin. Of these, 25,250 Bitcoin were purchased during the quarter at an average price of $65,232. This is higher than current levels following the coin’s recent decline.
Should you invest $1,000 in MicroStrategy now?
Before buying shares of MicroStrategy, consider the following:
The Motley Fool Stock Advisor The analyst team has just identified what they think this is The 10 best stocks so investors can buy it now… and MicroStrategy wasn’t one of them. The ten stocks that made the cut could deliver huge returns in the years to come.
Think about when Nvidia created this list on April 15, 2005… if you have $1,000 invested at the time of our recommendation, You would have $537,692!*
Stock Advisor provides investors with an easy-to-understand roadmap to success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor has service more than quadrupled the return of the S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns as of April 30, 2024
Eric Volkman holds positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Why MicroStrategy shares plunged nearly 18% on Tuesday was originally published by The Motley Fool