Crypto Crash Leaves MicroStrategy With Heavy Losses
MicroStrategy, an America-based embedded analytics platform, is in trouble due to its connection to Bitcoin. Over the past few weeks, Bitcoin’s value has seen significant declines, and as a result, companies such as MicroStrategy are starting to take the brunt of this destruction.
MicroStrategy suffers huge losses
Michael Saylor, CEO of MicroStrategy, released a recent Form 10-Q, in which he states that the first quarter was not great as, due to the crypto crash, the company lost over $170 million. and more than 60% of its operating expenses. Interestingly, this was before the top coin lost its $30,000 support.
The CEO revealed that for the three months ended March 31, 2022, they suffered a net loss due to the impairments suffered by the crypto asset, and in the future, they may not even recover or increase profitability on a quarterly or annual basis. . Adding that their digital asset impairments were a major contributor to the company’s net loss and operating expenses.
Even after this statement from the CEO of Microstrategy, some still argue that companies like MicroStrategy are not suffering at a high level. BTIG Managing Director Mark Palmer says that while he is heavily connected to BTC, he relies on his actual software offerings (which are still quite strong) rather than the most important coin.
Palmer says media sources focus on impairment charges, which can be significant, and present those numbers in a way that appears to negatively impact the company’s stock. However, this is not the truth as the inherent value of MicroStrategy lies in the business intelligence software and the value of bitcoin on its balance sheet which is easy to calculate by simply finding out the current price at any given time.
Oppenheimer & Company Executive Director Owen Lau also commented on the matter and said analysts and others would throw it out of the equation if you hold digital assets on the balance sheet in an immaterial way and you don’t ‘re not a bitcoin or MicroStrategy miner.
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