An Overview of the Profit and Loss Status of 7 Listed Companies Investing in Bitcoin

*Written by: jk, * Odaily Planet Daily

Although traditional internet giants often increase their Bitcoin holdings for diversification purposes (alternative investments), industry insiders often view this optimistically as a strong bullish signal for crypto, even following the idea of "following smart money" in their operations.

However, the recent earnings season has exposed the current situation—under the crypto bear market, many large companies' Bitcoin positions are also in floating losses; different companies have different investment strategies, either reducing holdings and taking profits, or holding steady and HODLing, or firmly buying to lower the average cost of holdings.

Odaily Planet Daily summarizes the business overview, stock performance, latest developments, and Bitcoin holding information (current quantity, average cost, profit and loss situation) of seven companies: Microstrategy, Galaxy, Tesla, Block Inc., Hut 8, Marathon Digital Holdings, and Meitu. We kindly remind everyone that earnings disclosures may have information lag and should not be used as a single investment reference indicator.

Microstrategy

MicroStrategy is a company that provides highly specialized business intelligence, mobile software, and cloud solutions. Founded in 1989 and headquartered in Tysons Corner, Virginia, USA, MicroStrategy offers a variety of analytics and mobile software solutions for data visualization, reporting, and dashboards. These solutions are often used to help businesses better understand, monitor, and utilize their data.

The company's latest product, MicroStrategy ONE, is designed to be a comprehensive, modern, open, and cloud-driven analytics platform, aiming to be a single solution for all analytics use cases. From self-service data analysis and business reporting to advanced applications and embedded solutions, the platform aims to "unleash the power of data" to help businesses gain a competitive advantage.

Under the leadership of CEO Michael Saylor, MicroStrategy has notably become one of the companies investing heavily in Bitcoin, using it as an asset reserve strategy.

According to the Q2 2023 earnings report, the company recorded an impairment expense of $24.1 million on its Bitcoin holdings in the second quarter, compared to $917.8 million in the same period last year and $18.9 million in the first quarter of this year. The company's digital asset impairment reflects the decline in Bitcoin's price relative to its acquisition price.

MicroStrategy CFO Andrew Kang stated in a statement: "As of July 31, 2023, we held 152,800 Bitcoins, having added 12,333 in the second quarter, the largest single-quarter increase since Q2 2021. We effectively raised funds through our market equity program and continued to increase our Bitcoin holdings on our balance sheet using operational cash. This is against the backdrop of increasing institutional interest, progress in accounting transparency, and clearer regulation for Bitcoin."

Currently, the average price of the Bitcoin held by MicroStrategy is approximately $29,668.

According to Coingecko data, MicroStrategy's total cost of holding Bitcoin is $4.127 billion, while these Bitcoins are currently valued at approximately $3.97 billion, accounting for about 0.728% of the total Bitcoin supply. Data shows that 46% of MicroStrategy's Bitcoin assets were acquired in 2020. In the third and fourth quarters of 2020, MicroStrategy purchased 38,250 Bitcoins (at an average price of $11,151) and 32,220 Bitcoins, respectively. As of August 17, these Bitcoins accounted for 46.12% of MicroStrategy's Bitcoin assets.

As of the current date, MicroStrategy's total market capitalization is $4.951 billion, with a stock price of $351.48. Compared to about $246.91 six months ago, the stock price has seen a significant increase of about 42%. However, the stock has also experienced volatility this year, peaking in early July when the price reached about $475.09. Since the year's peak, the stock price has retreated. This price volatility may reflect the market's multifaceted evaluation of MicroStrategy's strategies in business intelligence and Bitcoin investment.

Galaxy Digital

Galaxy Digital is a financial services and investment management company based in New York City, specializing in digital assets and blockchain technology. Since its establishment in 2018, the company has been building a comprehensive financial platform that includes three complementary operating businesses: global markets, asset management, and digital infrastructure solutions. Galaxy Digital aims to combine financial complexity with technical expertise to connect institutions with Web3 innovations.

The company offers a range of financial services, including trading, lending, strategic consulting services, institutional investment solutions, proprietary Bitcoin mining and custody services, network validation services, and the development of corporate custody technology. Galaxy Digital has multiple offices globally, including in North America, Europe, and Asia.

Founded and led by experienced hedge fund manager and former Goldman Sachs partner Mike Novogratz, the company has been at the forefront of promoting the application and acceptance of cryptocurrency and blockchain technology in the mainstream financial world. Through its diversified business portfolio and global influence, Galaxy Digital aims to provide comprehensive cryptocurrency and digital asset-related services to retail and institutional investors.

According to the Q2 2023 earnings report, Galaxy Digital performed well amid ongoing uncertainty and regulatory pressures. Novogratz stated that due to prudent risk management practices and a strong balance sheet, the company is moving towards long-term growth.

Financially, the net loss for the second quarter was $46 million, a significant decline from the net income of $134.2 million in Q1 2023. Operating expenses in the second quarter were $85.2 million, down 6% quarter-over-quarter and down 34% year-over-year. The company's partner capital (i.e., equity) at the end of the quarter was $1.5 billion, a 3% decrease from $1.6 billion at the end of Q1, but liquidity remains strong at $696 million as of June 30, 2023.

In terms of business, Galaxy Global Markets (GGM) generated trading revenue of $59.5 million, a 54% decrease quarter-over-quarter, primarily due to a decline in net realized gains from digital assets and derivatives. Investment banking revenue was $45,000, mainly due to a slowdown in mergers and capital raising activities. Galaxy Asset Management (GAM) generated asset management revenue of $33.8 million, a 619% increase quarter-over-quarter, primarily due to increased net realized gains on its venture capital platform. Galaxy Digital Infrastructure Solutions (GDIS) generated mining revenue of $15.4 million, a 51% increase quarter-over-quarter, mainly due to increased revenue from proprietary mining activities.

Currently, Galaxy holds approximately 12,545 Bitcoins, valued at about $326 million.

Compared to several other companies, Galaxy's stock price has shown relatively small fluctuations, currently priced at $5.08. Over the past year, the lowest price was $3.33, and the highest price was $8.30.

Galaxy's stock price over the past year. Source: Yahoo Finance

Tesla

Tesla, Inc. is a well-known American electric vehicle and clean energy company, led by CEO and major shareholder Elon Musk. Founded in 2003, the company initially started with the production of high-performance electric sports cars but has since expanded into a broader consumer market with models such as the Model S, Model X, Model 3, and Model Y.

In addition to electric vehicles, Tesla is also involved in renewable energy products, including solar panels, solar roofs, and home and commercial energy storage solutions (such as Powerwall, Powerpack, and Megapack). The company's goal is to accelerate the world's transition to sustainable energy.

In Q2 2023, Tesla's economic performance exceeded Wall Street's expectations. The company reported a net income increase of 20%, reaching $2.7 billion, primarily due to cheaper raw materials that helped offset the decline in vehicle prices. On the other hand, although new vehicle deliveries increased by 83% from April to June, revenue growth was not as strong, rising only 47% to $24.9 billion. However, this revenue figure still exceeded the average analyst expectation of $24.2 billion from a FactSet survey.

In the stock market, Tesla has also attracted significant attention. Its stock price has experienced substantial fluctuations but has shown a strong growth trend overall, becoming one of the highest-valued automotive manufacturers globally. From the beginning of the year at $108.1 to the current $245.01, Tesla's stock price has experienced significant volatility but has generally trended upwards in 2023. The peak price reached over $290. This growth reflects the market's positive view of Tesla's continued innovation and market leadership in the electric vehicle and renewable energy sectors. Currently, the company's total market capitalization has reached $77.7659 billion.

In the cryptocurrency space, Tesla is continuously in the spotlight due to its large-scale Bitcoin holdings, support for cryptocurrency payments, and Elon Musk being a key opinion leader in the industry. Tesla has not bought or sold Bitcoin for four consecutive quarters, with its current holding at 10,500 Bitcoins, valued at approximately $27.2 million, accounting for about 0.05% of the total Bitcoin supply.

However, Tesla has incurred significant losses from its Bitcoin investments: the total cost of Tesla's Bitcoin purchases is $336 million, exceeding its current value by 23.5%.

Block Inc.

Block Inc. (formerly Square Inc.) is a multinational technology conglomerate founded in 2009 by Jack Dorsey and Jim McKelvey. The company launched its first platform in 2010 and has been publicly traded on the New York Stock Exchange since November 2015, with the stock ticker SQ.

Block Inc. initially started as a payment platform aimed at small and medium-sized businesses, allowing them to accept credit card payments and use smartphones or tablets as point-of-sale (POS) systems. Although the company has rebranded as Block Inc., its flagship product for small businesses is still called "Square."

As the business has expanded, Block Inc. now has multiple business segments. Cash App is a mobile application that allows users to transfer money between each other and between users and businesses. Afterpay is a "buy now, pay later" service. Weebly is a website hosting service, while Tidal is a subscription-based music, podcast, and video streaming service offering audio and music videos.

Block Inc. is not only committed to providing financial and payment solutions but is also continuously entering emerging fintech fields, including cryptocurrency. Overall, the company aims to simplify the payment process through its diverse and comprehensive financial solutions, making it more seamless and convenient.

Block Inc. stock price over the year. Source: Yahoo Finance

Block Inc.'s stock price has shown significant volatility this year. From $64.64 at the beginning of the year, it has dropped to the current $58.17, with a market capitalization of $35.488 billion. Notably, the stock reached a peak of about $88 in early February but has since declined. Despite an overall downward trend since the beginning of the year, the overall trend is somewhat correlated with the U.S. stock market and has less correlation with cryptocurrency than other stocks. Its market capitalization remains relatively robust, indicating that the market still holds a certain level of confidence in this diversified fintech company.

Block Inc. performed well in its Q2 2023 earnings report, especially in a challenging economic environment. The company's net income for the three months was $5.3 billion, an increase from $4.4 billion in the same period last year, also exceeding Refinitiv's estimates. The fintech company's gross profit increased by 27% year-over-year to $1.87 billion. Additionally, the company raised its EBITDA forecast for 2023 from $1.3 billion to $1.5 billion.

The gross profit of Block's main business, Cash App, grew by 37% to $968 million. Meanwhile, the gross profit from the Square business also increased by 18% to $888 million. Company chairman Jack Dorsey stated that the company will continue to focus on expanding into international markets while also seeking to control costs, including reviewing stock-based compensation. He also mentioned that the company has begun to recruit more precisely, focusing on key roles and placing greater emphasis on performance management. Adjusted for the second quarter, Block's earnings per share were $0.39, exceeding analysts' forecast of $0.36.

According to Coingecko data, Block currently holds 8,027 Bitcoins, with a holding cost of $220 million, now valued at approximately $209 million, resulting in relatively small losses.

Hut 8

Hut 8 Mining Corp. is a Canadian Bitcoin mining company that primarily focuses on Bitcoin mining using advanced hardware and data center resources. The company is one of the largest publicly traded Bitcoin mining companies in North America, with considerable computing power. Hut 8 is not just a Bitcoin mining enterprise; it also provides other services and solutions related to cryptocurrency, such as high-performance computing.

Hut 8 typically establishes its mining facilities in areas with lower energy costs (such as some remote locations in Canada) to reduce operating costs and improve efficiency. This allows the company to remain competitive in the highly competitive cryptocurrency mining market.

Hut 8's data center locations. Source: Hut 8 official website

Hut 8's stock price has shown significant volatility in 2023, rising from $0.818 at the beginning of the year to the current $2.37, with a total market capitalization of $526.7 million. The stock reached an annual high of about $4 in mid-July before retreating. Nevertheless, compared to the beginning of the year, the stock price has still seen considerable growth. This price dynamic reflects investors' views on the company's performance and potential in the Bitcoin mining sector. Currently, Hut 8's total market capitalization is $526.7 million.

In Q2 2023, Hut 8's operating revenue fell to $19.2 million, a significant decline from $43.8 million in the same period last year. During this period, the number of Bitcoins mined by the company also decreased by nearly 58%, with only 399 Bitcoins mined, primarily due to increased Bitcoin network difficulty, the suspension of operations at the North Bay facility, and ongoing power supply issues at the Drayton Valley facility. Its high-performance computing (HPC) business also saw a slight decline, generating only $4.2 million in monthly recurring revenue, down from $4.7 million in the same period last year. As of the end of the quarter, the company's computing power reached 2.6 EH/s (excluding the North Bay facility), and it held 9,136 Bitcoins mined by itself. In this quarter, the company generated $14.7 million in revenue by selling 396 Bitcoins.

Currently, the value of the Bitcoins held by Hut 8 is approximately $24.2 million.

Last week, Hut 8 announced that it would merge with U.S. Data Mining Group, Inc. (doing business as "US Bitcoin Corp," abbreviated as "USBTC"). This transaction is expected to create a new company called "New Hut," headquartered in the United States. The new company will focus on cost-effective Bitcoin mining, diversified revenue streams, and industry-leading environmental, social, and governance (ESG) practices.

Hut 8's CEO Jaime Leverton stated that they look forward to obtaining approval from the U.S. Securities and Exchange Commission (SEC) for the registration statement of "New Hut" in the near future and believe that after completing this merger, the new company will become a stronger and more dynamic business entity. This entity will be supported by substantial legal currency revenue generated from Bitcoin and robust North American hosting, mining infrastructure, and high-performance computing operations.

Marathon Digital Holdings

Marathon Digital Holdings (formerly Marathon Patent Group) is an American company primarily focused on Bitcoin mining. Founded in 2010, the company initially concentrated on intellectual property (IP) but later transformed into a business dedicated to cryptocurrency mining and related activities.

Marathon Digital Holdings operates large-scale Bitcoin mining facilities and has multiple data centers across the United States. These data centers are equipped with high-performance mining hardware designed to mine new Bitcoins by solving complex mathematical problems and participate in maintaining the Bitcoin network.

The company's goal is to become one of the largest and most efficient Bitcoin mining enterprises in North America. Due to its large-scale energy demands, Marathon Digital Holdings also focuses on finding sustainable and cost-effective energy solutions.

In the mid-year earnings report, Marathon's chairman and CEO Fred Thiel stated:

"We held $113.7 million in unrestricted cash and cash equivalents at the end of the quarter, along with approximately 12,538 Bitcoins, which had a market value of about $38 million as of June 30. Although our cash position decreased by $11.2 million from Q1, we added 1,072 Bitcoins, which had a market value of about $32.7 million as of June 30."

"We accelerated progress in Q2, significantly improving our hash rate and efficiency… In Q2, we increased our effective hash rate from 11.5 to 17.7 EH/s. By growing our hash rate faster than the rest of the network and improving our uptime, we also increased our Bitcoin production. In Q2, we produced a record 2,926 Bitcoins, accounting for about 3.3% of the Bitcoin network rewards available during that period."

However, Marathon's earnings and revenue fell short of analysts' expectations. Currently, Marathon holds approximately 12,964 Bitcoins, valued at about $336 million. However, its purchase cost was only $189 million, resulting in a return of about 78%.

As of now, Marathon Digital Holdings' stock price is $12, significantly up from about $4.09 at the beginning of the year, nearly tripling. The highest point during the year reached $19.88. The company's current market capitalization is $2.091 billion. Such fluctuations in stock price and market capitalization may reflect the market's high attention to the company's strategies and performance in Bitcoin mining and cryptocurrency investment. Although the stock price has retreated from its peak this year, it still shows strong performance compared to the beginning of the year, which may indicate that investors hold an optimistic view of its long-term prospects. However, considering the volatility of the cryptocurrency market, this stock price performance may change at any time.

Meitu

Meitu is a Chinese technology company listed on the Hong Kong Stock Exchange, focusing on developing mobile applications and smartphones. Founded in 2008 and headquartered in Xiamen, Fujian Province, the company is best known for its namesake photo editing and beauty application—Meitu Xiuxiu, which has hundreds of millions of users worldwide. In addition to basic photo editing features, the app offers various beauty, filter, and AI-driven photo enhancement tools.

Meitu established its R&D center, MT Lab, in 2010, focusing on artificial intelligence and image innovation in areas such as computer vision, deep learning, and computer graphics.

As of December 2022, Meitu's monthly active users (MAU) reached 243 million, with nearly 80 million from overseas markets. These international users are distributed across 22 countries and regions, each with 10 million or more users, including Indonesia, Thailand, Brazil, Pakistan, the United States, Vietnam, Japan, Bangladesh, the Philippines, South Korea, Malaysia, Iran, Mexico, Nigeria, Canada, Turkey, Russia, Myanmar, South Africa, the United Kingdom, and Nepal.

In April 2021, Meitu announced a cryptocurrency holding of nearly $100 million. According to the latest earnings report, in the exchange documents from July, Meitu reported holding approximately 940 Bitcoins and 31,000 Ethereum, with total costs of $49.5 million and $50.5 million, respectively. Compared to the reported scale in 2021, Meitu's digital currency assets have decreased by over $40 million. This reduction has doubled compared to the previous quarter.

Among them, the Bitcoins costing nearly $50 million are now valued at only about $24.45 million.