Microstrategy Stock News and Forecast: MSTR earnings preview

Microstrategy to release earnings after the close on Tuesday.
MSTR stock has slumped in line with Bitcoin this year.
MSTR shares are down by over 32% so far in 2022.

Ivan Brian FXStreet

Microstrategy (MSTR) reports earnings after the close on Tuesday in what is sure to provide some volatility to the stock. Bitcoin has struggled through the start of the year, and this has had an obvious knock-on effect on the crypto sector. Microstrategy stock had been falling before the New Year and finds itself down over 50% in the last three months alone and just over 32% so far for 2022. After topping out at $1,315 back in February of last year in the meme stock craze, the stock fell back to $450 before again spiking in late November to just under $900. However, since then it has been a steady decline. MSTR stock closed Monday at $368, and that was after an 8% rise.

Microstrategy Stock News

Bitcoin is down nearly 40% in the last three months, so the performance of MSTR stock does not exactly come as a surprise. Microstrategy is a tech company involved in business intelligence software, but it has come to be synonymous with crypto currency due to its CEO Michael Saylor being a strong and vociferous proponent of Bitcoin.

Microstrategy holds a significant amount of Bitcoin, and some of the purchases of it have been funded through debt. The company raised $600 million in February 2021 via convertible notes to buy Bitcoin. Back in July CEO Michael Saylor said in an interview with CNBC, “We’ve got $2.2 billion of debt, and we pay about 1.5% interest, and we have a very long time horizon,” Saylor said on “Squawk on the Street.”

“Our point of view is being a leveraged, Bitcoin-long company is a good thing for our shareholders.” At the end of 2021, MSTR held 124,391 bitcoins bought at an approximate average price of $30,159 per coin, according to a tweet from CEO Michael Saylor.

The SEC recently rejected the accounting method used and said in a filing, "We note your response to prior comment 5 and we object to your adjustment for Bitcoin impairment charges in your non-GAAP measures,” the filing said. “Please revise to remove this adjustment in future filings.

The earnings are expected to drop after the close today. Earnings per share (EPS) is expected at $1.49, and revenues are expected to reach $133.2 million.

Microstrategy Stock Forecast

The downtrend is well-established, and really this is a proxy for Bitcoin. Risk appetites are waning despite this recent recovery, and growth and tech stocks are suffering. Add Bitcoin into the mix, and you have a potent combination. This will rocket as it has in the past when or if risk appetites return to last year's elevated levels. We doubt that mania will return fully, but Bitcoin has many more influences and is showing some strong correlation with gold as an anti-inflation hedge.

Microstrategy (MSTR) chart, daily

Like this article? Help us with some feedback by answering this survey:

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

GBP/USD advaces beyond 1.3450 after BoE decision, US Q2 GDP

GBP/USD gains positive momentum on Thursday, surpassing 1.3450 and trading at fresh multi-week highs. The Bank of England decided to maintain the benchmark rate unchanged at 3.75%. The MPC voted 6-3 to keep rates on hold, with the 3 dissenters favoring a rate hike. US Q2 GDP missing expectations helped the pair advance, while renewed US Dollar weakness across the FX board pushed the pair further up ahead of the monthly close.

EUR/USD confortable around 1.1530, highest in six weeks

The EUR/USD pair trades around 1.1530 in the American session on Thursday, reaching fresh six-week highs. The US Dollar is in sell-off mode, with multiple factors weighing on the American currency. Not only did the Federal Reserve vote divided to keep rates on hold on Wednesday, creating doubts about a September hike, but US Q2 GDP missed expectations. A suspected JPY intervention adds pressure on the Greenback.

Gold recovers the $4,100 level as US Dollar weakens further

Gold trades just above $4,100 amid a US Dollar sell-off. The Greenback enjoyed some near-term demand following Wednesday's post-FOMC downfall, but was unable to retain its gains. The preliminary estimate of the US Q2 GDP showed the economy grew at an annual rate of 1.5%, missing the market's expectations of 2.1%.

Bank of Japan set to keep interest rates unchanged after suspected Yen intervention

Investors are turning their attention to the Bank of Japan’s monetary policy announcement on Friday, after the Japanese Yen staged a dramatic rebound during Thursday's American session. The move came amid growing speculation that Japanese authorities intervened in the foreign exchange market after USD/JPY tumbled from above 163.00 to below 158.00 within minutes.

Aave to sunset Sonic, Aptos, zkSync, Scroll reserves, affecting $98 million in supply

Aave is planning to sunset 75 low-activity reserves across its decentralized finance protocol as part of a broader effort to reduce operational, technical and economic risks across its network of deployments.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.