BusinessPostCorner.com
No Result
View All Result
Wednesday, July 16, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

Saylor’s Strategy to register $5.9B loss after accounting change

April 7, 2025
in Accounting
Reading Time: 2 mins read
A A
0
Saylor’s Strategy to register .9B loss after accounting change
ShareShareShareShareShare

Michael Saylor’s Strategy said it will register an unrealized $5.9 billion loss in the first quarter after adopting an accounting change that requires valuing digital assets at market prices. 

Shares of the dot-com-era software maker turned leveraged Bitcoin proxy formerly known as MicroStrategy fell as much as 14% on Monday. Earlier, Bitcoin wiped out almost all of its gains since Donald Trump’s U.S. presidential election win in early November.

Strategy and fellow corporate buyers of Bitcoin are being made to recognize the unrealized changes that often produce big swings in earnings or, in the case of Strategy last quarter, losses. Strategy waited until the first quarter to adopt the accounting change that was approved last year. 

Prior to the accounting change, the Tysons Corner, Virginia-based company has been classifying its Bitcoin holdings as intangible assets — similar to brand recognition or trademarks. That designation forced Strategy to permanently mark down the value of its holdings when the price of Bitcoin dropped. Gains could only be recognized when tokens are sold, which Saylor has vowed not to do, even saying his digital wallet keys should be burned when he dies.   

Part of the first-quarter loss will actually result from Saylor’s recent spending binge, which has produced roughly $1 billion of paper losses on the $7.79 billion the company spent on Bitcoin in 2025, according to Bloomberg calculations. The company owned $41.8 billion of Bitcoin coming into the year, an amount that fell by nearly $5 billion in the first quarter with the 12% drop in the price of the tokens. That equates to about $6 billion of “mark-to-market” losses, according to Bloomberg calculations as of March 31, before taxes.

At the same time, the company’s retained earnings will whipsaw into positive territory, courtesy of a nearly $13 billion boost from the new accounting, according to Bloomberg calculations. 

Strategy became the first public company to buy Bitcoin as a capital allocation strategy in 2020, with co-founder and chairman Saylor saying the enterprise software firm needed to embrace the policy to survive. It grabbed the attention of Wall Street as the shares took off with speculators using it as a proxy for the digital currency. 

Saylor took advantage of the surging demand to sell more shares to purchase additional Bitcoin, eventually expanding to convertible debt and preferred shares offerings to fuel the buying spree. The stock is up more than 2,200% since the start of August 2020. 

Hedge funds have been driving some of the demand for the convertible debt, as they seek out Strategy for trades that incorporate buying the bonds and selling the shares short, essentially betting on the underlying stock’s volatility.   

With the price of Bitcoin faltering along with other risky assets this year, the meteoric appreciation in the value of Strategy’s shares has also slowed. And last week, Strategy’s shares got their only sell rating after boutique equity research firm Monness, Crespi, Hardt & Co. cut its view on the firm, saying the market for the securities used to fund the Bitcoin purchases is increasingly saturated.

Credit: Source link

ShareTweetSendPinShare
Previous Post

Trump’s tariffs raise tax-cut stakes with recession fears rising

Next Post

Art of Accounting: A tax preparer’s possible story (but hopefully not yours)

Next Post
Art of Accounting: A tax preparer’s possible story (but hopefully not yours)

Art of Accounting: A tax preparer's possible story (but hopefully not yours)

Breaking: Bitcoin Hits New All-Time High as New Bull Market Begins

Breaking: Bitcoin Hits New All-Time High as New Bull Market Begins

July 9, 2025
PCAOB sanctions Goldman & Company, Raymond Chabot Grant Thronton, PWR

PCAOB sanctions Goldman & Company, Raymond Chabot Grant Thronton, PWR

July 11, 2025
Franklin Alliance acquires Robert Morris & Company

Franklin Alliance acquires Robert Morris & Company

July 9, 2025
German defence minister calls on arms makers to deliver

German defence minister calls on arms makers to deliver

July 13, 2025
Verito offering WISP service for firms

Verito offering WISP service for firms

July 14, 2025
Airlines angry at planned rise in Heathrow passenger charges

Airlines angry at planned rise in Heathrow passenger charges

July 11, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Bitcoin ‘Peak Signal’ Not in Yet, Rally May Continue: CryptoQuant Analyst

Bitcoin ‘Peak Signal’ Not in Yet, Rally May Continue: CryptoQuant Analyst

July 16, 2025
Co-op boss says sorry to 6.5m people who had data stolen in hack

Co-op boss says sorry to 6.5m people who had data stolen in hack

July 16, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!