MicroStrategy Takes $170M Q1 Impairment Charge on Bitcoin Holdings

The company reported holding 129,218 BTC, worth slightly less than $5 billion, as of March 31.

By Sujith Somraaj

2 min read

MicroStrategy, which holds the most Bitcoin of any public company, reported an impairment charge of $170.1 million in the first quarter of 2022 and has similarly seen $1.071 billion in total BTC value evaporate since it began buying the cryptocurrency in August 2020.

Impairment charges are accounting measures used by companies to disclose certain assets that have declined in value. The company reported quarterly revenue of $119 million, a 3% year-over-year decline.

As of March 31, MicroStrategy held 129,218 BTC (worth nearly $5 billion), about which CEO Michael Saylor tweeted.

The business intelligence and software firm has taken on about $2 billion in debt to buy Bitcoin. If the price falls below roughly $21,000, it could be forced to sell those crypto holdings.

“We took out the loan at a 25% loan-to-value, the margin call occurs [at] 50% loan-to-value. So, essentially, Bitcoin needs to cut in half, or around $21,000, before we'd have a margin call," CTO Phong Lee said on Tuesday's earnings call.

On March 29, the company received a $205 million loan from Silvergate Bank to purchase an additional 4,167 Bitcoin at $45,714 per coin.

Shares of MicroStrategy (MSTR) on Wednesday were down about 2% to $341.47 as of this writing. The stock is down almost 39% this year as the rest of the Nasdaq has shed more than 20%.

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