Monday evening, Microstrategy revealed loss-making results for the first quarter, while the group took up the cause of bitcoin.

Monday evening on Wall Street, there was astonishment with the results of Microstrategy, the specialist in business solutions which took up the cause of bitcoin. Yesterday, the company announced that it had made a net loss of $53 million in the first quarter and revealed revenues of $115 million, down 5% year-over-year.

Results difficult to understand as bitcoin has soared in recent months, which could have boosted the performance of the group which currently holds 214,400 bitcoins in its treasury. Explanations can, however, be found in the group’s accounting provision of $191 million over the period. For the moment, Microstrategy has not adopted the new accounting standards intended to refine the “fair value” (the real market value) of digital assets as closely as possible to current prices.

Old accounting standards

This will officially come into effect at the beginning of January 2025, but nothing prevents players in the sector from getting started now, which Microstrategy has not done. Result, with these old standards, the value retained for the bitcoins held by Microstrategy is 23,600 dollars/piece, or a little more than 5 billion in total. However, when bitcoin exceeded $73,000 in mid-March, Microstrategy’s war chest was valued at more than $15 billion.

The group’s accounting loss was not sanctioned by investors, the stock lost more than 12% on Wall Street around 5:20 p.m. this Tuesday. But this little mishap has the merit of making an orange light flash for companies exposed to bitcoin. We will have to quickly adopt new accounting standards to avoid depreciation, which is paid in hard dollars and not in bitcoins.

Antoine Larigaudrie with Pauline Armandet


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