MicroStrategy (MSTR) reported a net operating loss of $53.1 million, or $3.09 per share, in the first quarter after taking into account a digital asset impairment charge of $191.6 million. dollars, according to a report. Monday afternoon press release.
While some expected the company to adopt the new standard for accounting for the fair value of digital assets and thus record a significant profit thanks to Bitcoin’s rally in the first quarter, the company chose not to do so. Under the old standard, MicroStrategy valued its bitcoin holdings at quarter end at a price of $23,680 each, or $5.1 billion, instead of the March closing price of $71,028, or $15. 2 billion dollars.
The company also announced a small addition in April of 122 tokens to its Bitcoin stack, bringing total holdings to 214,400. This would be valued at $13.5 billion at bitcoin’s current price of around $63,000.
So far for all of 2024, MSTR has acquired 25,250 bitcoins for $1.65 billion, an average price of $65,232 each.
Shares are down 3.3% in after-hours trading.
Speaking on the earnings call, CFO Andrew Kang said the company is fully considering adopting the new digital asset fair value accounting rule and is currently evaluating the best time to do so. The Financial Accounting Standards Board (FASB) has required the new rule to be implemented by January 1, 2025, but early adoption is permitted.
Learn more: MicroStrategy could merit inclusion in the S&P 500 if it adopts new accounting rules: reference
Update (April 29, 10:31 p.m. UTC): Added comments from CFO.
