In Brief:
- Microstrategy plans to continue investing in Bitcoin.
- The business intelligence company’s strategy is to “buy and hold,” CFO Phong Le said.
- The company has no intentions to sell its holdings and is continuously exploring alternative ways to invest in Bitcoin.
MicroStrategy, a bitcoin-accumulating software company, has turned down a request from US securities regulators to amend its disclosure in future filings. Even if bitcoin’s value has dropped in recent days, chief financial officer Phong Le says the company intends to maintain investing in the cryptocurrency.
In an interview with The Wall Street Journal, Le said it’s unclear whether the company would acquire more bitcoin this year than it did last year, but it will keep buying.
Along with automaker Tesla Inc. and payment company Square, which just renamed itself Block Inc., the Tysons Corner, Va.-based software company is one of a handful of companies with bitcoin holdings.
“Our strategy with bitcoin has been to buy and hold, so to the extent, we have excess cash flows or we find other ways to raise money, we continue to put it into bitcoin,” Chief Financial Officer Phong Le said.
If the market gets more liquid, which might happen in the next year or two, MicroStrategy is considering buying bitcoin-backed bonds. According to the firm’s filings with the Securities and Exchange Commission, it owns roughly 124,391 bitcoins as of December 29, 2021.
Since September 2020, when it declared that Bitcoin (BTC) would be an important part of its capital allocation plan, MicroStrategy has been buying the cryptocurrency. As a result, the stock has been sliding in tandem with Bitcoin, which fell below $35,000 last week. On Monday, Bitcoin continued to fall, dropping about 6% of its value to trade at $33,589.
Meanwhile, the Securities and Exchange Commission (SEC) wants MicroStrategy to change how it discloses its bitcoin holdings in future filings. Instead of using accounting techniques that correct for bitcoin impairment losses, the securities watchdog wrote to the firm, demanding that it properly reflect bitcoin’s volatility in its reports.
MicroStrategy is “constantly” exploring alternative ways to use bitcoin to enhance value for shareholders as the company has no intentions to sell its holdings.
