Software program agency MicroStrategy not too long ago reported a internet loss for the primary quarter of 2022, which seems to be pushed largely by its Bitcoin holdings.
The agency reported a internet lack of $170 million, or $11.58 per share for Q1, barely decrease than $183.2 million final yr. A bulk of that loss was pushed by a digital asset impairment cost of $170.1 million, as the worth of its Bitcoin holdings fell.
MicroStrategy has the biggest Bitcoin holdings amongst any publicly listed firm, with about 129,218 tokens held at a complete market worth of $4.9 billion. The determine represents practically two-thirds of the agency’s whole property.
The agency is owned by in style Bitcoin maximalist Michael Saylor.
MicroStrategy is holding Bitcoin at a loss
The software program developer stated in a press release that the carrying worth of its Bitcoin is almost $3 billion, reflecting a cumulative impairment lack of over $1 billion since acquisition.
The common value of every Bitcoin held by MicroStrategy is about $30,700- nicely under present market ranges of about $38,000. The worth is even under Bitcoin’s lowest degree this yr, of round $33,000. On condition that MicroStrategy’s information is just until March 31, it doesn’t replicate the practically 20% drop in Bitcoin costs by April.
The agency had bought 4,167 tokens in March at a mean value of $45,714 per Bitcoin. As of Might 4, it has misplaced roughly $38 million on that funding.
Weak point on the earth’s largest cryptocurrency is more likely to weigh additional on MicroStrategy’s stability sheet.
Saylor doesn’t seem like secretly promoting BTC
MicroStrategy’s outcomes present that a minimum of till March 31, accusations of secret Bitcoin promoting by Saylor seem like unfounded. Saylor has denied the allegations, and has maintained his rhetoric on Bitcoin adoption.
However given the losses it has on its Bitcoin holdings, the agency may face strain from shareholders to start promoting Bitcoin to enhance its profitability. This situation may come into play if Bitcoin costs fall additional. The agency can also be leveraging debt towards its Bitcoin purchases, making it extra inclined to dropping cash.
Nonetheless, there seems to be no indication from MicroStrategy or Saylor that it intends to promote tokens. MicroStrategy additionally stated it may explore more opportunities with its Bitcoin that it not tied to debt- roughly 95,000 tokens.
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