Why MicroStrategy Shares Crashed Last Month

Shares of MicroStrategy (NASDAQ: MSTR) fell 25.3% in May 2022, according to data from S&P Global Market Intelligence. The business intelligence expert with a massive investment in Bitcoin (CRYPTO: BTC) tokens posted disappointing earnings in early May. Bitcoin prices took another deep dive around the same time, amplifying the market pressure on MicroStrategy's stock.

MicroStrategy's first-quarter sales fell 3% year over year, stopping at $119 million. On the bottom line, the company reported a net loss of $10.42 per share, compared to earnings of $1.54 per share in the year-ago period. Your average Wall Street analyst expected earnings near $1.41 per share on revenues in the neighborhood of $127 million.

The bulk of MicroStrategy's net losses consisted of digital asset impairment charges, based on the falling value of the company's Bitcoin investments. That pricing trend didn't stop MicroStrategy from adding to its Bitcoin hoard, though. The company took out a term loan to purchase another $216 million in Bitcoin during the first quarter, lifting the balance sheet's number of tokens from 214,391 to 129,218.

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Source Fool.com