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MicroStrategy reported a $170 million loss on its Bitcoin holdings in the first quarter.

The software company now controls 129,218 bitcoins, which are worth somewhat less than $5 billion.

MicroStrategy (MSTR) reported a non-cash impairment charge of $170.1 million in the first quarter, up from $146.6 million in the fourth quarter.

Additionally, the firm stated that Andrew Kang would succeed Phong Le as chief financial officer on or about May 9, after which Le will continue in his capacity as president of MicroStrategy. Kang formerly served as the chief financial officer of technology business Greensky Inc.

The digital asset impairment represents the decrease in the price of bitcoin (BTC) relative to the acquisition price. According to generally accepted accounting principles, the value of digital assets such as cryptocurrencies must be first recorded at their cost and then changed only if their value is harmed or decreases. However, unless an asset is sold, any increase in price is not reported.

MicroStrategy recorded $831 million in total digital asset impairment losses in 2021, up from $71 million in 2020.

The corporation said that it purchased the 129,218 bitcoins it possessed at the end of March 31, 2022, for $3.97 billion, equating to an average cost per bitcoin of around $30,700. At the current price of bitcoin, about $37,662, such assets are worth nearly $4.9 billion.

MicroStrategy has continuing to rapidly collect bitcoin under the leadership of bitcoin maximalist Michael Saylor. MicroStrategy acquired a $205 million loan from Silvergate Bank (SI) at the end of March, guaranteed by its current bitcoin holdings, to possibly purchase further bitcoin.

MicroStrategy's Chief Financial Officer Phong Le stated on the company's earnings call Tuesday that bitcoin would need to decrease almost half of its present value before a margin call on the Silvergate loan would occur. Le said, though, that MicroStrategy might increase its bitcoin contribution to the collateral package and avert this eventuality.

MicroStrategy purchased 4,167 bitcoin for $190.5 million between February 15 and April 4, equating to an average price of $45,714 per bitcoin.

In January, the software company said that it will cease disclosing adjusted earnings for impairment losses and gains on bitcoin sales in response to the Securities and Exchange Commission's complaints.

MicroStrategy's stock fell roughly 0.1 percent to $343.20 in Tuesday after-hours trading. The stock has lost around 37% year to date.


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