MicroStrategy Adds 122 Bitcoins to Treasury Despite Q1 Net Loss of $53.1M

MicroStrategy, a top corporate investor in Bitcoin (BTC), made a decisive move in April by adding 122 Bitcoins to its treasury. This action comes despite the company reporting a net loss of $53.1 million in the first quarter of 2024.

This strategic decision underscores MicroStrategy’s commitment to accumulating Bitcoin as a long-term investment, even in the face of short-term financial challenges.

Net Loss and Impairment Loss

In the first quarter financial report, MicroStrategy disclosed a net loss of $53.1 million, primarily influenced by a significant digital asset impairment loss of $191.6 million. This impairment loss, which increased tenfold from the previous year, reflects the volatile nature of digital asset valuation and its impact on financial statements.

Despite the net loss, MicroStrategy reported revenue of $115.2 million for the first quarter, representing a 5.5% decrease in the same period in 2023.

Notably, MicroStrategy has yet to adopt the new digital asset fair value accounting standard, which would have recognized the 65% increase in Bitcoin’s fair value during the quarter. As a result, MicroStrategy’s carrying value of Bitcoin was marked at $5.07 million, significantly lower than its fair market value.

MicroStrategy Bitcoin Acquisition and Treasury Holdings

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

Despite the financial challenges, MicroStrategy continued its Bitcoin acquisition spree, adding 122 Bitcoins to its treasury for $7.8 million in April. This brings MicroStrategy’s total Bitcoin holdings to 214,400, acquired at an average purchase price of $35,180 per Bitcoin. 

The company raised $1.5 billion from two convertible note debt offerings in the first quarter to fund its Bitcoin acquisitions, marking its 14th consecutive quarter of adding more Bitcoin to its balance sheet.

Market Reaction and Stock Performance

Following the announcement of its Q1 financial results, MicroStrategy’s stock fell 2.63% in after-hours trading, according to data from Google Finance. The stock had experienced a surge in the first quarter, rising over 170% to $1704 by the end of March. However, it has since fallen to $1,292, reflecting the volatility of the cryptocurrency market and MicroStrategy’s stock price.

While the short-term financial implications are evident, MicroStrategy’s strategic focus on Bitcoin accumulation underscores its confidence in the future of digital assets.