$1 billion loss for Bitcoin bull

MicroStrategy co-founder Michael Saylor gave up his chief executive officer title and said he’ll focus more on Bitcoin after the enterprise-software maker reported a loss of more than $1 billion related to the second-quarter plunge in the price of the cryptocurrency.

Saylor, who founded the Tysons Corner, Virginia-based company in 1989, will continue to serve as executive chairman. MicroStrategy President Phong Le will take on the chief executive role. The company also filed with the Securities and Exchange Commission to register $450 million in stock.

MicroStrategy took a $917.8 million impairment charge related to the decline in the value of the Bitcoin it holds. Bitcoin tumbled 59% in the quarter, and traded about 45% lower than the price at the end of the year-earlier period.

Revenue dropped to $122.1 million. Analysts polled by Bloomberg expected revenue of $123.25 million in the second quarter. Net quarterly loss of $1.062 billion compared with a loss of $299.3 million in the same quarter of last year. The quartelry loss is almost exactly twice the company’s revenue in the last 12 months.

As of June 30, the carrying value of the company’s 129,699 Bitcoins was $1.988 billion, the company said, reflecting the cumulative impairment loss of $1.989 billion. The cumulative amount is now more than Bitcoin on the company’s balance sheet.

MicroStrategy began investing in Bitcoin in the summer of 2020, after Saylor said he saw it as a hedge against inflation. The company’s shares surged that year by more than 170% as the value of the Bitcoin jumped.

Shares of MicroStrategy fell about 2.3% in post-market trading. The stock is down about 50% this year, on par with Bitcoin’s slide.