MicroStrategy Reports $53.1M Loss in Q1 2024 Despite Continued Bitcoin Acquisitions
Summary:
In Q1 2024, MicroStrategy, the largest corporate Bitcoin holder, reported a net loss of $53.1 million. The loss is attributed to a digital asset impairment loss of $191.6 million and a 5.5% revenue drop from Q1 2023. As a result, the company stock fell 3.3% in after-hours trading. Despite this, MicroStrategy continues to invest in Bitcoin, acquiring an additional 122 Bitcoin, totalling their ownership to 214,400 Bitcoins worth $13.5 billion.
Bitcoin's biggest corporate stakeholder, MicroStrategy, has recently disclosed a net loss of $53.1 million for Q1 2024 as it continues to invest in Bitcoin throughout April. The substantial loss is attributed to a reported $191.6 million impairment loss on digital assets for the quarter, an impressive 10-fold increase from the same period last year. The company's revenue dipped by a marginal 5.5% compared to Q1 2023, sliding down to $115.2 million according to the quarterly results. Despite this, the firm has yet to adopt the novel digital asset fair value accounting standard. This means the firm overlooked the 65% surge in Bitcoin's fair market value during the quarter. Consequently, MicroStrategy's Bitcoin carrying value was registered at $5.07 million, translating to $23,680 per Bitcoin, as per traditional accounting procedures. This contrasts starkly with the $15.2 billion valuation if the fair value approach had been utilized. The fact that the company had previously voiced support for this new standard through a letter to the Financial Accounting Standards Board (FASB) during May 2023 is noteworthy. Further emphasizing this point, FASB revised its rules seven months later, making digital asset fair value reporting compulsory for fiscal years post Dec. 15, 2024. Meanwhile, the software company, transitioning into a "Bitcoin development company," has recently acquired an additional 122 Bitcoin, worth $7.8 million in April, as stated in their financial report. Consequently, the company now owns 214,400 Bitcoin, with a valuation of $13.5 billion, purchased at an average cost of $35,180 per Bitcoin. To further expand its Bitcoin portfolio, the firm amassed $1.5 billion from two convertible note debt offerings, enabling the purchase of an additional 25,250 Bitcoin in the first quarter. This marks the company's 14th quarter in a row of adding Bitcoin to its balance sheet, reported by Phong Le, MicroStrategy's CEO and President. MicroStrategy's stock, however, took a hit of 3.3% during after-hours trading following the news. Bitcoin's 65% surge in the first quarter resulted in an almost unparalleled surge in the value of MicroStrategy's shares, skyrocketing over 170% by the end of March to $1704. However, MicroStrategy's stock has since depreciated to $1,292.
Published At
4/30/2024 2:52:24 AM
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