Bitcoin Supporter Microstrategy Reported A Loss In Its Latest Financial Report.

MicroStrategy has not yet adopted the new accounting standard that would account for billions of dollars in paper gains resulting from a 65% price increase in Bitcoin.

In the first quarter of 2024, MicroStrategy reported a net loss of $53.1 million, which is attributed to a $191.6 million impairment loss on its digital assets. This loss marks a tenfold increase compared to the same period of the previous year. Additionally, the company's revenues also fell by 5.5% to $115.2 million compared to the same quarter last year.

Despite the loss, the company continued to purchase Bitcoin and has not yet implemented a new accounting standard that would consider the 65% increase in the market value of Bitcoin. If MicroStrategy had adopted this new standard, the book value of its Bitcoin investments would have been shown as $15.2 billion instead of $5.07 billion.

In May 2023, MicroStrategy wrote a letter to the Financial Accounting Standards Board (FASB) supporting the adoption of this new standard. FASB considered this request and introduced a regulation that mandates reporting digital assets at fair value, effective from December 15, 2024.

Finally, according to the company's financial reports, in April, it purchased an additional 122 Bitcoins valued at $7.8 million. This purchase further positions MicroStrategy as a "Bitcoin development company."

MicroStrategy currently owns 214,400 Bitcoins, purchased at an average price of $35,180 each, amounting to a total value of $13.5 billion.

The company's CEO, Phong Le, announced that during the first quarter, the company raised $1.5 billion, which will be used to purchase an additional 25,250 Bitcoins. This will further increase the amount of Bitcoin on MicroStrategy's balance sheet.

Following the announcement, MicroStrategy's shares fell by 3.3% in after-hours trading, according to Google Finance.

The 65% increase in Bitcoin's value led to an unprecedented rally for MicroStrategy in the first quarter. However, despite the shares peaking at $1704 in March, they have since dropped to $1292, as per Google Finance.

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