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MicroStrategy Records $170M Impairment Fee on Bitcoin in Q1

American business intelligence firm MicroStrategy released its financial results for the first quarter, in which it uncovered a $170.1 million non-cash impairment of digital assets.

The company also announced the appointment of Andrew Kang as the new senior executive vice president and chief financial officer, to take over from Phong Le on or about May 9, who will remain as the company’s president.

  • As of March 31, 2022, MicroStrategy held approximately 129,218 bitcoins, originally purchased for $3.972 billion. The book value of $2.896 billion reflects accumulated impairment losses of $1.071 billion.
  • The report further mentioned that the original cost basis and the market value of the Bitcoin– Holdings of the Michael Saylor-led company at the end of March were $3.967 billion and $5.893 billion, respectively. This essentially corresponded to an average cost per bitcoin of around $30,700 or a market price per BTC of $45,602.79.
  • According to the current CFO, MicroStrategy has no plans to engage in any sales and will instead continue to acquire and hold Bitcoin for the long term. During the earnings call, Lee also stated:

“We had another active and successful quarter. We bought $215 million worth of bitcoin at an average purchase price of $44,645 per bitcoin, net of fees and expenses. We have not sold any bitcoin yet. We view our bitcoin holdings as long-term holdings and do not plan to sell bitcoin at this time. “

  • MicroStrategy has also raised US$205 million from Silvergate Bank in a three-year interest-free loan, which is funded by Bitcoin is secured. The loan matures on March 23, 2025.
  • The company also said that it may “conservatively review future opportunities to generate returns on unencumbered MacroStrategy bitcoins.”
  • Earlier this year, the US Securities and Exchange Commission (SEC) rejected MicroStrategy’s accounting adjustment. To reflect the regulator’s concerns, the software company said in a filing that it would make the adjustment for impairment losses and gains on sales related to the cryptocurrency will delete.

Source: Crypto News Deutsch

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