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    MicroStrategy shares fumble as Q3 earnings fall just short of estimates

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    MicroStrategy’s Q3 earnings report showed a 10.3% decrease from last year, leading to a 4.23% drop in stock price to $247.31, and a further 1.75% decrease after the market closed. The company managed a 5.1% return on Bitcoin holdings, bagging a profit of $81.7 million and showing a gross margin of 70.4%. It plans to raise $42 billion over three years to invest in Bitcoin. Network economist Timothy Peterson warns a dip in Bitcoin value, perhaps after the US elections, could lead to a further decrease in MicroStrategy’s stock price.

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    MicroStrategy’s stock fell by 5.9% after its third-quarter earnings came out not quite as high as most people expected. To add, some folks reckon their shares might stumble a bit more after the US elections.

    In a report that came out on October 30, the company earned $116.1 million – a dip of 10.3% from the third quarter of last year and about 5.22% less than what analysts had predicted.

    On a brighter note, the company did manage a 5.1% return on its Bitcoin holdings and bagged a tidy profit of $81.7 million, showing a gross profit margin of 70.4%. The company’s been getting more involved in Bitcoin this year.

    At the end of the trading day on October 30, MicroStrategy witnessed a 4.23% decrease in its stock price, dipping down to $247.31. After the market closed, the stock took a further 1.75% hit and is currently priced at $242.99, according to data from Google Finance.

    In a conference call about the earnings, the company’s chief compared MicroStrategy’s performance to tech giants like Nvidia and Tesla since August 2020. MicroStrategy has grown by a staggering 1,989%, even outpacing Nvidia’s growth of 1,165%.

    Happily, he added that MicroStrategy isn’t just a company that made a lucky investment. They’re at the start of a wave of digital transformation of capital. He reckons tons of companies will realize this in time.

    However, Timothy Peterson, a network economist, hints that if Bitcoin takes a hit after the US presidential election on November 5, the share price of MicroStrategy might drop even further. If Bitcoin’s value goes down, MicroStrategy’s stock price could dive even steeper.

    Peterson points out that the higher risk from Bitcoin holdings could lead MicroStrategy to lose more value than Bitcoin itself in a downturn. But, if Bitcoin crosses its all-time high of $73,679, MicroStrategy’s shares are expected to increase, as the firm echoes Bitcoin’s performance.

    Besides this, the company announced its plans to raise a whopping $42 billion over the next three years, through a mix of equity and fixed-income securities, to buy more Bitcoin.

    Please remember this isn’t investment advice or an endorsement. Always do your own research and consider the risk of your decisions.

    Source: Cointelegraph

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