Michael Saylor, the co-founder of MicroStrategy Inc., relinquished his role as Chief Executive Officer. The enterprise- software producer suffered more than a $1 billion loss caused by the plunge in Bitcoin value in the second quarter.
Saylor, who founded the Tyson- corner Virginia-based firm in 1989, says he will now focus more on Bitcoin. He will continue serving as the executive chairman and the bitcoin buying strategy. Phong Le, the President of MicroStrategy, will take over as Chief Executive Officer.
As per Bloomberg News, the company registered 450,000 shares in its filing with the Securities and Exchange Commission.
After the results were declared, Saylor, in a conference call, said digital assets adoption is accelerating globally and becoming a more expansive job. He said he was comfortable increasing the scope of his efforts while knowing that the execution of the company business plan is secure with Phong’s capabilities.
MicroStrategy took a hit of $917.8 million towards impairment charges. This was linked to the decline in the value of Bitcoin it holds. Bitcoin crashed 59% during the quarter and traded at 45% lower than its price in the same quarter last year.
Revenue of MicroStrategy in the second quarter fell to $122.1 million, lower than Bloomberg polled analysts’ estimates of 4123.25 million. The net loss in the quarter was $1.062 billion compared to $299.3 billion in the same quarter last year. The loss in the quarter is twice as much as the company’s entire revenue in 12 months.
Wave Financials’ Head of decentralized finance, Henry Elder, said the company’s original consulting business and strategy need full attention. He said Saylor can now focus on what he does best: promote Bitcoin. The more the company makes money more Bitcoin they can purchase.
The carrying value of the company’s Bitcoin holding of 129,699 Bitcoins was $1.988 billion as of June 30. The company’s value included a $1.989 billion cumulative impairment loss. The Bitcoin total value is less than the value of impairment loss on the balance sheet.
MicroStrategy started investing in Bitcoin in June 2020 after the CEO said that he saw investment in Bitcoin as a hedge against inflation. The company’s share climbed by more than 170% that year as Bitcoin value jumped considerably.
MicroStrategy Inc’s share fell about 2% in post-market trading Tuesday. The stock is down by almost 50% in 2022 and at par slide in Bitcoin’s value.
