MicroStrategy’s Bitcoin Holdings Take a Record $3.4 Billion Hit
When MicroStrategy Inc. began buying Bitcoin in bulk in the summer of 2020, CEO Michael Saylor said it was because inflation would make cash worthless. The crypto pile he has since accumulated was worth $3.4 billion less at the end of the second quarter than the previous one.
Technically, the decline is yet another paper loss for the enterprise software maker under US accounting rules until any of the Bitcoin is sold, but there are consequences. MicroStrategy will likely need to take a substantial impairment charge when it reports second-quarter results. And for shareholders, the stock tumbled 66% in the quarter ended Thursday, outpacing Bitcoin’s 59% decline.
Saylor has downplayed any concerns, sticking to the strategy and adding to his stockpile last quarter as Bitcoin experienced its biggest price drop in more than a decade. MicroStrategy noted at the end of June that it would report results as normal later in the coming quarter even though Wall Street regulators typically require companies to flag big losses much earlier.
MicroStrategy’s Bitcoin stash was worth about $5.9 billion at the end of the first quarter, which means that with Bitcoin finishing around $18,900 on June 30, that same pile -- including some small purchases announced at the end of June -- was worth about $2.45 billion, or 58% less than just three months ago.
“To reiterate our strategy, we seek to acquire and hold Bitcoin and long-term,” said Phong Le, MicroStrategy’s president and CFO, on a May 3 conference call. “We view our Bitcoin holdings as long-term holdings and we do not currently plan to engage in sales of Bitcoin.”
Shirish Jajodia, senior director of treasury and investor relations at MicroStrategy, responded to a request for comment by
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