Strategy (MSTR) Reports Fourth-Quarter Earnings
In a recent announcement, Strategy (MSTR) disclosed a significant financial downturn for the fourth quarter, reporting a net loss of $3.03 per share. This marks a stark contrast to the income of $0.50 per share reported in the same period last year.
The primary factor contributing to this loss was an impairment charge associated with the company’s substantial holdings of 471,107 Bitcoin (BTC) tokens. This financial hit underscores the volatile nature of cryptocurrency investments and the challenges faced by companies heavily invested in digital assets.
This week has been particularly eventful for Strategy, featuring not only the disappointing earnings report but also a notable upsizing of the company’s preferred stock offering. In addition, the firm underwent a name change just hours before releasing its earnings, signaling a potential shift in strategy or branding.
Currently, Strategy has ceased its long-standing practice of acquiring more Bitcoin, and its holdings are now valued at approximately $45 billion. This shift comes in light of the new fair value accounting rule introduced by the Financial Stability Accounting Board (FASB) last year, which applies to corporates holding digital assets. While the adoption of this rule was voluntary until the end of 2024, it will become mandatory starting in the first quarter of this year.
As a result of these developments, shares of Strategy have experienced a slight decline in after-hours trading. Earlier in the day, the stock fell by over 3% during regular market hours, coinciding with a dip in Bitcoin prices to the $97,000 range.
