Key Points
- MicroStrategy, the largest corporate Bitcoin holder, reported a net loss of $53 million in Q1 2024.
- Despite the loss, the company purchased an additional 122 Bitcoins in April.
MicroStrategy, recognized as the leading corporate holder of Bitcoins, recently shared its Q1 2024 results. The company reported a net loss of $53 million.
For the first quarter, MicroStrategy disclosed a $191.6 million digital asset impairment loss. This figure is a tenfold increase compared to the same period in the previous year.
Revenue Drops and Accounting Standards
In comparison to Q1 2023, the revenue generated by MicroStrategy for Q1 2024 decreased by 5.5%, amounting to $11.52 million. However, the company has not yet adopted the new digital asset fair value accounting standard. This standard would have taken into account the 65% surge in BTC price during Q1 2024.
Due to this, MicroStrategy’s carrying value of BTC holdings was $5.07 million at a price of $23,680 per Bitcoin, using the traditional method. If the new accounting standards and a fair value approach were used, this could be $15.2 billion.
Missed S&P 500 Inclusion
According to a research note by Benchmark last week, many companies owning Bitcoin have chosen to adopt the new ASU 2023-08 guidance early. To be considered for potential inclusion in the S&P 500 by the index committee, a company must show positive earnings in its latest quarter. Unfortunately, MicroStrategy missed this opportunity while reporting net losses during Q1 2024.
Additional Bitcoin Purchases
Despite the losses, MicroStrategy’s Executive Chairman Michael Saylor announced that the company bought an additional 122 Bitcoin worth $7.8 million in April. This purchase brings the company’s total BTC holdings count to 214,000 Bitcoins, now valued at $13.5 billion, purchased at an average price of $35,180.
Phong Le, President and Chief Executive Officer at MicroStrategy, commented on the development, stating that the company raised over $1.5 billion in the first quarter. They achieved this by executing their capital markets strategy, which included two successful convertible debt offerings. The company added 25,250 additional bitcoins since the end of the fourth quarter, marking their 14th consecutive quarter of adding more Bitcoins to their balance sheet.
MicroStrategy (MSTR) experienced a 3.3% decline in its stock during after-hours trading following the announcement. The significant 65% surge in Bitcoin sparked an exceptional rally for MicroStrategy in the first quarter, with its stock skyrocketing over 170% to reach $1704 by the end of March. However, MicroStrategy’s stock has since retreated to $1,292.
If MicroStrategy had been included in the S&P 500, the MSTR would have likely resumed its rally, potentially reaching $1,800.
