1 min read.Updated: 30 Jul 2021, 01:39 PM ISTLivemint
As of 30 June 2021, the carrying value of the company’s digital assets (comprised of approximately 105,085 bitcoins) was $2.051 billion that reflected cumulative impairment losses of $689.6 million
NEW DELHI: US-based MicroStrategy Inc, the world’s biggest corporate holder of bitcoin, has pledged to keep on buying the original cryptocurrency despite witnessing cumulative impairment losses of $689.6 million from holding digital assets on its books.
A paper loss or profit is something that has not yet been realized.
In its second-quarter earnings, which were released on Thursday night, the business intelligence company, said that as of 30 June 2021, the carrying value of MicroStrategy’s digital assets (comprised of approximately 105,085 bitcoins) was $2.051 billion. This reflected cumulative impairment losses of $689.6 million since acquisition and an average carrying amount per bitcoin of approximately $19,518.
The company disclosed an impairment loss of $424.8 million during the June quarter of 2021.
MicroStrategy is among one of the earliest corporate backers of the world’s oldest as well as the biggest cryptocurrency. The company in August 2020 had said that it was using existing cash on its balance sheet to acquire the cryptocurrency.
MacroStrategy LLC, a subsidiary of MicroStrategy, holds approximately 92,079 of the bitcoins.
MicroStrategy said that the non-GAAP digital asset cost basis and non-GAAP calculation of the market value of MicroStrategy's bitcoin were $2.741 billion and $3.653 billion, respectively, which reflects an average cost per bitcoin of approximately $26,080 and a market price per bitcoin of $34,763.47.
Despite this, the company is looking to add to its bitcoin position. “We continue to be pleased by the results of the implementation of our digital asset strategy. Our latest capital raise allowed us to expand our digital holdings, which now exceed 105,000 bitcoins. Going forward, we intend to continue to deploy additional capital into our digital asset strategy," said Michael Saylor, CEO, MicroStrategy in a statement.
During the June quarter, MicroStrategy’s gross profit was $102.3 million, representing an 81.6% gross margin, compared to a gross margin of 78.3% last year.
Earlier this week, US electric-car maker Tesla Inc’s in its June quarter earnings had reported that it was still holding $1.3 billion worth of bitcoin on its balance sheet, putting to rest speculations that the company might have trimmed its position during the period.
In its quarterly earnings, Tesla also said that it took a bitcoin-related impairment charge of $23 million.
Tesla along with MicroStrategy are the world’s biggest corporate holders of bitcoin.
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