MicroStrategy, the prominent holder of Bitcoin in the corporate sector, disclosed a net loss of $53.1 million for the first quarter of 2024. Despite this, the company persisted in accumulating more Bitcoin throughout April.
The reported net loss was largely influenced by a $191.6 million impairment loss related to digital assets during the quarter, a notable increase from the previous year’s first quarter. Revenue also experienced a decline of 5.5% compared to Q1 2023, totaling $115.2 million, as detailed in MicroStrategy’s Q1 results filing.
Interestingly, MicroStrategy has yet to adopt the new digital asset fair value accounting standard. Had they adopted this standard, the fair value increase of Bitcoin by 65% during the quarter would have significantly impacted the company’s valuation. MicroStrategy’s Bitcoin holdings now value at $5.07 billion at a rate of $23,680 per Bitcoin by traditional accounting method, contrasting with a potential valuation of $15.2 billion under the fair value approach.
Despite advocating for the new standard to the Financial Accounting Standards Board (FASB) in May 2023, MicroStrategy has not yet implemented it. The FASB subsequently amended its rules to mandate fair value reporting of digital assets for fiscal years after December 15, 2024.
In April alone, MicroStrategy acquired an additional 122 Bitcoin for $7.8 million, as disclosed in the financial statement, bringing its total holdings to 214,400 Bitcoin valued at $13.5 billion, acquired at an average price of $35,180 per Bitcoin.
In April, @MicroStrategy acquired an additional 122 BTC for $7.8 million and now holds 214,400 BTC. Please join us at 5pm ET as we discuss our Q1 2024 financial results and answer questions about the outlook for #BusinessIntelligence and #Bitcoin. $MSTR https://t.co/h40yyrgEb0
— Michael Saylor⚡️ (@saylor) April 29, 2024
To finance further Bitcoin acquisitions, MicroStrategy raised $1.5 billion through two convertible note debt offerings during Q1. This marked the company’s 14th consecutive quarter of expanding its Bitcoin holdings, according to Phong Le, MicroStrategy’s president and CEO.
Following the announcement, MicroStrategy’s stock experienced a 3.3% decline in after-hours trading, as reported by Google Finance. Despite a surge to $1704 by the end of March driven by Bitcoin’s 65% increase, MicroStrategy’s stock has since fallen to $1,292, according to Google Finance.