MicroStrategy recorded losses due to Bitcoin slump in Q1

  • The largest Bitcoin company owner recorded a Bitcoin impairment loss of $170.1 million in the first three months of 2022
  • The latest Bitcoin addition was funded by a $205 million Bitcoin-backed loan.

The world’s largest Bitcoin hodler company MicroStrategy on Tuesday released its financial figures for the first quarter of 2022 published and reported total sales of 119.3 million, which corresponds to a decrease of 2.9% compared to the previous year.

A hard Q1

MicroStrategy also said that it had seen a cumulative impairment loss of $1.071 billion for its Bitcoin strategy. In the three months to March 31, during which Bitcoin fell by 1.2%, the software intelligence company held 129,218 BTC, which at that time had a total market value of $ 5.893 billion and a book value of $ 2.896 billion.

During the recent purchases of the company, a whole 4,167 BTC tokens were added to its portfolio. The corporate digital asset Hodler bought the tokens between February 18 and April 4 after taking out a three-year loan of $205 million, backed by more than four times Bitcoin ($820 million).

We have also strengthened our position as a leading public company Bitcoin investor by issuing our first Bitcoin-backed fixed-term loan. We have proven that our Bitcoin can be used productively as collateral in capital raising transactions, which allows us to further implement our business strategy.“, said CEO Michael Saylor.

The Virginia-based company also noted that non-GAAP (operating) expenses totaled $263.6 million in the first quarter of 2022, of which $170.1 million was attributable to impairment losses on Bitcoin holdings. This loss in digital assets amounted to $ 194.1 million in the first quarter of last year.

“The operating loss for the first quarter of 2022 was $ 170.0 million, compared to $ 183.2 million in the first quarter of 2021. The net loss for the first quarter of 2022 was $ 130.8 million, or $ 11.58 per share on a diluted basis, compared to $ 110.0 million, or $ 11.40 per share on a diluted basis, for the first quarter of 2021. In these amounts, impairments for digital assets in the amount of 170.1 million USD and 194.1 million USD for the first quarter of 2022 and 2021, respectively,” it says in press release.

Overall, operating expenses decreased by 7% compared to the figures recorded at that time in the previous year.

Andrew Kang joins MicroStrategy

MicroStrategy also announced the appointment of Andrew Kang as its new CFO and Senior Executive VP. Kang, who previously held the same two positions at Greensky, has a wealth of experience in the financial and capital markets.

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