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MicroStrategy Adds More Bitcoin Despite Q1 $53.1M Net Loss

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MicroStrategy Adds More Bitcoin Despite Q1 $53.1M Net Loss

  • According to Q1 earnings filing, revenue declined 5.5% compared to the Q1 of 2023.
  • The company spent $7.8 million in April to purchase an additional 122 Bitcoin.

In spite of reporting a financial loss of $53.1 million in the first quarter of 2024, the biggest corporate holder of Bitcoin, MicroStrategy, proceeded to stack additional Bitcoin in April.

The company’s digital asset impairment loss increased tenfold from the first quarter of 2023 to $191.6 million in the quarter, leading to the net loss. According to MicroStrategy’s Q1 earnings filing, revenue declined 5.5% compared to the first quarter of 2023, hitting $115.2 million.

Despite Bitcoin’s 65% quarterly gain in fair value (also known as market value), the company has not yet implemented the new fair value accounting standard for digital assets.

Consequently, MicroStrategy did not record $15.2 billion for its Bitcoin holdings when using the fair value technique; instead, it recorded $5.07 billion at $23,680 per Bitcoin using the conventional accounting method.

Despite the firm’s May 2023 letter supporting the new standard to the Financial Accounting Standards Board (FASB), this has occurred. For fiscal years ending after December 15, 2024, the FASB revised its regulations to require digital asset fair value reporting, which was about seven months later.

Banking on Bitcoin

According to the financial statement, the software business that rebranded itself as a “Bitcoin development company” spent $7.8 million in April to purchase an additional 122 Bitcoin. With an average purchase price of $35,180, it currently owns 214,400 Bitcoin, with a value of $13.5 billion.

The company collected $1.5 billion via two convertible note debt offerings to purchase an additional 25,250 Bitcoin in the first quarter. This marks the fourteenth consecutive quarter that MicroStrategy has added Bitcoin to its reserves, as pointed out by Phong Le, president and CEO of the company.

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