Michael Saylor's Microstratergy Takes $147 M Charge In Q4 On BTC Price Fall

Bitcoin bull Michael Saylor's Microstrategy has reported a digital asset impairment charge of over $147 million in the last quarter of 2021, following the crash in Bitcoin's price since the crypto touched an all-time high of $69,000 in November. CFO Phong Le said during the earnings call Tuesday that the company expects an additional significant impairment charge during the first quarter of 2022 as Bitcoin's volatility continues.

As of 1.42 a.m. ET, Bitcoin was trading at $36,938.57, Coinmarketcap data showed.

MicroStrategy provides business analytics products and services. It was co-founded by Saylor, a self-styled crypto influencer; Sanju Bansal; and Thomas Spahr in 1989. Shares in the company fell 1% during after-hours trading Wednesday. The shares have fallen almost one-third in the last month.

The non-GAAP digital asset impairment charge of $146.6 million the company reported is up from $65.2 million reported in the previous quarter. The value of digital assets including cryptocurrencies must be recognized at their cost of acquisition and only changed if their value falls. However, if the price goes up, it will not get recognized till the asset is sold.

For the full year, the company reported a $831 million digital asset impairment charge, compaed to just $71 million in the previous year.

At the end of 2021, the company held about 124,391 Bitcoins, which were valued at about $5.7 billion, it said in its earnings statement. It bought 53,922 Bitcoins last year at an average price of $48,710 including fees and expenses.

The company also bought an additional 660 Bitcoins at an average price of about $37,865 per Bitcoin, including fees and expenses, between Dec. 30 and Jan. 31, 2022, Microstrategy said in a regulatory filing Tuesday. As of Jan. 31, the company held about 125,051 Bitcoins.

The SEC had objected to MicroStrategy's accounting adjustment for its Bitcoin holdings in December. The company told the regulator that it would "revise its disclosures of non-GAAP measures in future filings to remove the adjustment for impairment losses and gains on sale related to Bitcoin, as requested by the Commission."

CFO Phong Le said Tuesday the company is still bullish on the prospects of Bitcoin.