The software intelligence company MicroStrategy (NASDAQ: MSTR) has recently updated its quarterly update. However, investors are worried.
MicroStrategy (NASDAQ: MSTR) recently disclosed its 2024 fiscal year quarter performance. The company raised over $1.5 billion through capital market activities, including two profitable convertible debt offerings.
MSTR: Quarter 1 Financial Update
The company has acquired 25,250 Bitcoins since the quarter, marking the 14th consecutive quarter of expanding its Bitcoin holdings. While overall revenues declined, the company’s subscription services and subscription billings continued to show double-digit growth rates, highlighting the transition of its software business to a cloud-native platform.
By March 31, 2024, MicroStrategy held $81.3 million in cash and digital assets worth $5.074 billion. In March 2024, they issued $800 million in Convertible Senior Notes due 2030 with a yield of 0.625% and $603.8 million in aggregate principal amount of Convertible Senior Notes due 2031 with a yield of 0.875%. The net proceeds from these offerings amounted to $782 million and $592.3 million, respectively.
As of March 31, 2024, the carrying values of the Convertible Notes due in 2030 and those due in 2031 stood at $782.2 million and $592.4 million, respectively, categorized as long-term liabilities.
The Rise of MSTR Stock Price
MicroStrategy shares have skyrocketed by nearly 100% since the start of the year, mainly driven by the surge in Bitcoin value ahead of the introduction of spot Bitcoin ETFs and the upcoming Bitcoin halving event.
The founder, Michael J. Saylor’s Bitcoin holdings have been thriving during the market surge. Despite significant stock sales, most of his wealth is tied up in his Class B holdings of MicroStrategy, along with the 17,732 BTC he acquired in 2020, currently valued at around $1.1 billion.
This year, the rise in Bitcoin’s value has increased MicroStrategy’s returns due to the launch of spot BTC exchange-traded funds (ETFs) in January. The Bitcoin halving, which occurs every four years and halves rewards for miners, has also increased market participation.
The Founder’s Take
Saylor notes that MicroStrategy’s ongoing advantage as a leveraged BTC play without the associated management fees is valuable in a market where consumers can purchase Bitcoin directly on various exchanges or invest in different new ETFs.
Analysts predict that Bitcoin’s price will start rising after halving. This can have a significant impact on Microstrategy’s balance sheet. However, the US markets are moving like a wave as the earnings report season is here. Currently near all-time highs, the equity space expects a rate cut soon to thrive. However, analysts foresee the rate cuts near September of this year.
Conclusion
MicroStrategy has acquired 25,250 bitcoins, marking their 14th consecutive quarter of expanding their bitcoin holdings, while their subscription services revenues showed double-digit growth rates. Analysts predict that Bitcoin’s price will start rising post-halving. US markets are near all-time highs and expect a rate cut soon.
Disclaimer
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