The business software firm owns about 130,000 bitcoins worth approximately $2.5 billion.Read MoreCoinDesk
MicroStrategy (MSTR) posted a minimal digital asset impairment charge of $727,000 on its bitcoin (BTC) holdings in the third quarter, down significantly from $917.8 million in the second quarter as the price of bitcoin remained relatively stable at the end of the second and third quarters, according to its latest earnings report.
The company’s digital asset impairment reflects the decline in the price of bitcoin versus the price at which the bitcoin was acquired. Under standard accounting rules the value of digital assets such as cryptocurrencies must be recorded at their cost and then only adjusted if their value is impaired, or goes down. But if the price rises, that does not get reported unless an asset is sold.
In its earnings press release, MicroStrategy noted it was encouraged by the Financial Accounting Standards Board’s recent support of the use of fair value accounting for bitcoin, which would allow companies to report losses and gains immediately, as they would other traditional financial assets. MicroStrategy’s chief financial officer, Andrew Kang, said in a statement he thought such a change would “promote additional institutional adoption of bitcoin as an asset class.”
Between Aug. 2 and Sept. 19, MicroStrategy bought 301 bitcoins for about $6 million, according to a filing with the Securities and Exchange Commission. The purchase brought MicroStrategy’s total holdings of bitcoin to almost 130,000. At bitcoin’s current price of about $20,440, the value of those holdings is approximately $2.66 billion. MicroStrategy’s entire market capitalization is roughly $2.9 billion.
As of Sept. 30, 2022, the original cost basis and market value of MicroStrategy’s bitcoin holdings were $3.983 billion and $2.532 billion, respectively, which reflects an average cost per bitcoin of approximately $30,639 and a market price per bitcoin of $19,480.51, the company reported.
Following the release of its results, MicroStrategy shares were rising 2.9% to $264.54. Shares have tumbled around 51% year to date, slightly better than bitcoin’s roughly 56% drop over the same time period.
MIcroStrategy is planning to hold an earnings call with analysts at 5 p.m. ET.
UPDATE (Nov. 1, 20:40 UTC): Added information on MicroStrategy’s digital asset impairment and updated its after-hours share price.
Read more about
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
The latest price moves in bitcoin (BTC) and crypto markets in context for Oct. 1…
Data from crypto exchanges OKX and Binance, popular among retail market participants, show minimal activity…
Daily block reward gross profit fell to the lowest "on recent record" last month, the…
In an analysis shared on X, Kelly Greer, Vice President of Trading at Galaxy Digital,…
The $100,000 call is the most popular bitcoin option on Deribit.Read MoreCoinDesk: Bitcoin, Ethereum, Crypto…
The firm now holds over 500 bitcoin after a first tranche of purchases in April.Read…