Microstrategy continues to suffer unrealized losses due to the falling bitcoin price, and the company’s stock is affected. Ahead of the company’s second-quarter earnings report next week, Jefferies downgraded their rating from “hold” to “underperform.”
In a recent interview, Jefferies analyst Brent Till said the decision was influenced by the company’s lack of focus on business intelligence. He added that the company is expected to provide an update on Microstrategy’s bitcoin strategy. And this is important against the backdrop of the prolonged bearish sentiment in the crypto space over the past few months.
We await an update on management’s intentions to continue investing in bitcoin. The poor coverage is due to MicroStrategy’s inefficiency in business intelligence amid a more challenging macroeconomic environment.
Microstrategy founder and CEO Michael Saylor has long described himself as an active supporter of BTC. He has repeatedly spoken out in support of the major cryptocurrency, predicting exceptional growth in the long term.
As such, it is unlikely that Saylor’s company will make any changes to its bitcoin strategy. Microstrategy is the world’s largest institutional cryptocurrency holder, holding a total of 129,918 BTC.
The company has purchased bitcoins at an average price of $30,700 over several years in various market cycles. Last month, it was estimated that the company suffered an unrealized loss of more than $1 billion because of the bear market.
Despite such a loss, Saylor has not lost confidence in bitcoin, saying that his company anticipated the volatility and developed a strategy accordingly.