MicroStrategy announced a net loss of $249.7 million for the fourth quarter
MicroStrategy sold bitcoin for the first time during the fourth quarter
MicroStrategy (MSTR) purchased 8,813 bitcoins during the significant crypto market decline of 2022, incurring a $1.28 billion impairment loss for the year.
By the end of the year, the company had spent a total of $3.9 billion to purchase 132,500 bitcoins for an average price of $30,137.
The company's bitcoin holdings were valued at $1.8 billion at the end of the quarter. The value of MicroStrategy's holdings as of Thursday afternoon's bitcoin price was $3.16 billion.
In after-hours trading on Thursday, MicroStrategy shares dropped as much as 3%. This year, the stock has increased by more than 9%, and shares increased by more than 9% during normal trading hours on Thursday.
According to information from Bloomberg, the maker of business intelligence software recorded sales of $132.6 million for the fourth quarter, just beating the $131 million experts had predicted.
Andrew Kang the CFO of MicroStrategy says "Our corporate strategy and commitment in purchasing, holding, and expanding our bitcoin position for the long run remains unchanged".
As of the end of the fourth quarter, MicroStrategy had a valuation adjustment of $197.6 million on its holdings of bitcoin, bringing the total amount of these charges to $2.15 billion.
The founder and executive chairman of the company, Michael Saylor previously said that the purchase of bitcoin increased the company's visibility in the public eye. Saylor resigned as CEO in August so that he could concentrate on the business's bitcoin strategy and associated advocacy projects.
As of December 31, MicroStrategy had approximately $450 million available for sale under its current authorization, having issued $46.2 million worth of its stock during the quarter.
In addition, MicroStrategy sold bitcoin for the first time during the fourth quarter, harvesting its losses to reduce capital gains tax, according to an SEC filing.
Massive write-downs of the company's bitcoin holdings have also sparked debate about how cryptocurrencies should be disclosed on the balance sheet of a public company.
The value of holdings in cryptocurrencies must be written down to the lowest price point over the applicable time period as prices fall in order for them to be reported according to current accounting rules. In the alternative, those assets cannot be marked up when prices increase until they are sold.
According to Financial Accounting Standards Board (FASB), which decided on Wednesday to release a proposal for public discussion by late March that would have corporates value some crypto at fair value like stocks, the treatment will probably alter by the end of 2024.
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