What's Going On With MicroStrategy Stock Tuesday?

MicroStrategy Inc MSTR shares are trading lower Tuesday after the company reported worse-than-expected financial results for the first quarter.

What Happened: MicroStrategy said first-quarter revenue fell 5% year-over-year to $115.2 million, which missed the consensus estimate of $121.725 million, according to estimates from Benzinga Pro. The company reported a quarterly loss of $3.09 per share, which may not compare to estimates for a loss of 55 cents per share.

Product licenses and subscription services revenues were down 0.9% in the first quarter. Product support revenues fell 4.3%, and other services revenue declined 17.6%.

MicroStrategy ended the quarter with approximately $81.3 million in cash and cash equivalents after purchasing 25,250 Bitcoin BTC/USD in the quarter for a total cost of about $1.65 billion. The company held a total of 214,400 bitcoin as of April 26.

“In the first quarter we raised over $1.5 billion by executing again on our capital markets strategy including two successful convertible debt offerings. We acquired 25,250 additional bitcoins since the end of the fourth quarter, our 14th consecutive quarter of adding more bitcoin to our balance sheet,” said Andrew Kang, CFO of MicroStrategy.

“We believe that the combination of our operating structure, bitcoin strategy, and focus on technology innovation provides a unique opportunity for value creation for our shareholders.”

Following the print, Canaccord Genuity analyst Joseph Vafi maintained MicroStrategy with a Buy rating and lowered the price target from $1,810 to $1,590.

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MSTR Price Action: MicroStrategy shares were down 6.88% at $1,204.00 at the time of publication, according to Benzinga Pro.

Photo: Eivind Pedersen from Pixabay.