Microstrategy lost $146M to Bitcoin impairment charges in Q4 2021

MicroStrategy, the luck 500 institution with a 125,051 Bitcoin (BTC)-strong treasury, announced its Q4 2021 fiscal results connected Feb. 2.

The organization bundle solution supplier reported a nett nonaccomplishment of $146.6 cardinal incurred successful impairment charges connected its Bitcoin holdings. The precocious impairment losses added to the company’s operating expenses which saw a 125% summation astatine $248 cardinal arsenic compared to the aforesaid 4th past year.

An impairment nonaccomplishment is simply a recognized simplification successful the acquisition outgo of an plus that is triggered by a diminution successful its just value. When the just worth of an plus declines beneath its acquisition amount, the quality is written off.

The steadfast has mislaid astir a cardinal dollars ($901 million) successful impairment charges connected its BTC holdings implicit the past six quarters. 

MicroStrategy decided to adhd BTC impairment charges aft the U.S. Securities and Exchange Commission (SEC) rejected its existing ‘non-GAAP’ Bitcoin accounting methods. SEC asked the concern quality steadfast to adhd share-based compensation disbursal and impairment losses and gains connected sale.

The impairment losses of $146.6 cardinal were the third-highest for the institution wherever it accounted for 25% of its BTC acquisition successful the aforesaid quarter. The highest impairment nonaccomplishment came successful the 2nd 4th of 2021 wherever it mislaid astir 80% of the full BTC worth purchased successful that quarter. MicroStrategy recorded a nett nonaccomplishment of $90 cardinal oregon $8.43 per stock connected a diluted ground successful Q4.

Related: MicroStrategy buys the dip by purchasing 660 Bitcoin for $25M

MicroStrategy presently holds a full of 125,051 BTC acquired for astir $3.78 cardinal astatine an mean terms of $30,200 per Bitcoin. 

Microstrategy started buying Bitcoin successful August 2020 to usage it arsenic a treasury hedge alternatively of the U.S. Dollar. The steadfast has been instrumental successful bringing Bitcoin to organization firms and nationalist companies including the likes of Tesla and SpaceX.