United States securities and exchange commission logo
October 7, 2021
Phong Le
President & Chief Financial Officer
Microstrategy Incorporated
1850 Towers Crescent Plaza
Tysons Corner, VA 22182
Re: Microstrategy
Incorporated
Form 10-K for
Fiscal Year Ended December 31, 2020
Filed February 12,
2021
Form 10-Q for the
Quarter Ended June 30, 2021
Filed July 29, 2021
File No. 000-24435
Dear Mr. Le:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2020
Item 1. Business
Bitcoin Acquisition Strategy, page 10
1. To provide greater
transparency in future filings for your bitcoin acquisition strategy line
of business, please
include a tabular presentation in MD&A with the following entries (as
of the end of the
period covered by the periodic report): number of bitcoins held, number
of bitcoins purchased
during the period covered by the report, number of bitcoins sold
during the period
covered by the report, average purchase price per bitcoin
purchased during the
period, average sales price per bitcoin sold during the period, source
of capital used to
purchase bitcoins during the period, high and low value of bitcoin
holdings during the
period and value of bitcoin holdings at the end of the period.
Phong Le
Microstrategy Incorporated
October 7, 2021
Page 2
Item 11. Executive Compensation, page 65
2. In future filings, please include a discussion of how the shares
repurchased pursuant to
your share repurchase program impacted performance targets used to
determine executive
compensation.
General
3. We note that your forum selection provision in your bylaws identifies
the Court of
Chancery of the State of Delaware (or, if the Court of Chancery of the
State of Delaware
does not have jurisdiction, then any other state court located in the
State of Delaware, or if
no state court located within the State of Delaware has jurisdiction,
the federal district
court for the District of Delaware) as the exclusive forum for certain
litigation, including
any derivative action. Please disclose whether this provision
applies to actions arising
under the Securities Act or Exchange Act. If the provision applies to
Securities Act
claims, in future filings, please clearly describe the provision in
your disclosure including
any risks to investors related to the provision. Please also state
that there is uncertainty as
to whether a court would enforce such provision and that investors
cannot waive
compliance with the federal securities laws and the rules and
regulations thereunder. If the
provision does not apply to actions arising under the Securities Act
or Exchange Act,
please tell us how you will inform investors in future filings that
the provision does not
apply to any actions arising under the Securities Act or Exchange Act.
4. We note that since altering your business model to include the
purchase of bitcoin you
have generally filed a Form 8-K concurrent with your purchases.
However, we note that
you purchased approximately $1.026 billion in bitcoin on February 24,
2021 and 13,005
bitcoin on June 21, 2021 and did not file Form 8-Ks. Please advise as
to your process for
determining whether a bitcoin purchase triggers the need to file a
Form 8-K, including
why Item 2.01 of Form 8-K has not been triggered for any of your
bitcoin purchases.
Form 10-Q for the Quarterly Period Ended June 30, 2021
Non-GAAP Financial Measures, page 27
5. Please tell us and expand your discussion to explain why you believe
that adjusting for
bitcoin impairment charges provides useful information to investors in
light of your
strategy and business purpose for purchasing and holding bitcoin.
Refer to
Item 10(e)(1)(i)(C) of Regulation S-K.
6. Please tell us whether you use GAAP diluted shares as reflected on your
income statement
FirstName LastNamePhong Le
to calculate non-GAAP diluted earnings per share for fiscal year 2021
periods. If so, tell
Comapany NameMicrostrategy
us why Incorporated
you do not include an adjustment to your weighted average
shares to include
dilutive instruments
October 7, 2021 Page 2 outstanding considering that you had non-GAAP net
income.
FirstName LastName
Phong Le
FirstName LastNamePhong
Microstrategy Incorporated Le
Comapany
October NameMicrostrategy Incorporated
7, 2021
October
Page 3 7, 2021 Page 3
FirstName LastName
7. In future filings, please disclose the source of the fair value per
bitcoin used to present the
market value of your bitcoin at the reporting period end.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Rebekah Lindsey, Senior Staff Accountant, at (202)
551-3303 or
Kathleen Collins, Accounting Branch Chief, at (202) 551-3499 if you have
questions regarding
comments on the financial statements and related matters. Please contact
Alexandra Barone,
Staff Attorney, at (202) 551-8816 or Larry Spirgel, Office Chief, at (202)
551-3815 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology