MicroStrategy Inc.'s most recent crypto spending spree should deliver another hit to the company's bottom line.
The Tysons Corner, Virginia-based enterprise software company said Monday that it purchased an additional 13,005 bitcoins for about $489 million in cash at an average price of about $37,617 per bitcoin. The news did little to slow a dramatic slide in the world's largest cryptocurrency, with prices slumping nearly 10 percent, to roughly $32,300.
As a result of the freefall, MicroStrategy may have to mark down the value of the bitcoins it just purchased. Accounting rules dictate that the firm will have to write down its holdings once the market value dips below the price at which it acquired the coin. Bitcoin touched an intraday low of $31,735 on Monday, meaning that MicroStrategy may incur a nearly $77 million charge, according to data compiled by Bloomberg.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
