MicroStrategy’s Q4 Financial Reveals Paper Loss of $1.3B

• On Thursday, MicroStrategy’s stock rose about 10%, to $300.
• In order to offset a $34 million tax deficit, the corporation sold 704 BTC in the last quarter.

MicroStrategy, a business analytics firm, said Thursday that it had lost money for the eighth straight quarter, but that it would maintain its policy of keeping Bitcoin on its balance sheet. Bitcoin’s value dropped to $23,439 after the quarterly earnings report was released. On Thursday, MicroStrategy’s stock rose about 10%, to $300, although it was trading below $280 in pre-market activity.

Q4 financials reveal that MicroStrategy has 132,500 bitcoins worth $1.840 billion. This corresponds to an average carrying value per bitcoin of about $13,887 and impairment losses of $2.153 billion since purchase. Furthermore, MicroStrategy’s Bitcoin impairment losses increased to $197.6 million in Q4 2022 from $146.6 million in Q4 2021. Moreover, the firm reported a paper loss of $1.3B on its bitcoin holdings in 2022.

Will Continue to Hold BTC on Balance Sheet

MicroStrategy’s bitcoin had a market worth of $2.194 billion on December 31, 2022, down from its initial cost base of $3.993 billion. As a result, the market price of one bitcoin is now about $16,556.32, while the average cost per bitcoin is close to $30,137.

In order to offset a $34 million tax deficit, the corporation sold 704 BTC in the last quarter. However, after the sale, the business increased its Bitcoin holdings by 2500 BTC. Michael Saylor, the company’s executive chairman, made the statement during an earnings call that the company’s performance since adopting Bitcoin had exceeded that of key indexes and corporations like Google, Apple, Microsoft, and Amazon. Moreover, the firm has made clear that it would continue holding Bitcoin on its balance sheet.

MicroStrategy’s stock price increases beyond $300 a year later in 2023, inspiring investor optimism amid Bitcoin’s recent surge to over $24,000. However, pre-market trading has shown that the stock is trading at 280, down more than 4%.