MicroStrategy, a leading corporate Bitcoin holder, reported a net loss of $53.1 million in Q1 2024, despite continuing to accumulate more Bitcoin. The loss was largely due to a $191.6 million digital asset impairment loss, a tenfold increase from the previous year. Additionally, the firm’s revenue dropped by 5.5% to $115.2 million compared to Q1 2023.
The company has yet to adopt the new digital asset fair value accounting standard, which would have accounted for the 65% increase in Bitcoin’s market value during the quarter. Consequently, MicroStrategy’s Bitcoin carrying value was marked at $5.07 million at $23,680 per Bitcoin, rather than $15.2 billion under the fair value approach.
Despite advocating for the new standard in a letter to the Financial Accounting Standards Board (FASB) in May 2023, and FASB amending its rules seven months later to mandate fair value reporting of digital assets post-Dec. 15, 2024, the firm has yet to adopt it. Meanwhile, the firm, which has transitioned into a “Bitcoin development company,” purchased an additional 122 Bitcoin for $7.8 million in April.
Currently, MicroStrategy holds 214,400 Bitcoin, valued at $13.5 billion, purchased at an average price of $35,180. The firm raised $1.5 billion through two convertible note debt offerings to acquire another 25,250 Bitcoin in Q1, marking its 14th consecutive quarter of Bitcoin accumulation. However, MicroStrategy’s stock fell 3.3% in after-hours trading following the announcement, despite Bitcoin’s 65% increase sparking a significant rally in MicroStrategy’s stock in Q1, which surged over 170% to $1704 by the end of March. The stock has since fallen to $1,292.
