MicroStrategy’s 124k Bitcoin holdings might be valued at $30,200 per coin on average according to crypto investment strategist, Gabor Gurbacs. The business intelligence firm which is touted to be the biggest corporate backer of the king coin received a significant amount of attention after its usage of non-GAAP rules came under the notice of the SEC who objected and asked the firm to revise it.
In addition to that, on 21st January 2022, the firm’s shares MSTR plummeted by 20%, the biggest single loss since Feb 23 last year. The drop in the shares of MicroStrategy seems to correlate with Bitcoin’s price tumbling by more than 7% around 4:15 p.m. in New York on the same day.
With respect to the GAAP issue, The firm told the SEC it used non-GAAP measures to give investors a fuller picture of its finances. The firm in its response claimed that if it showed declines in value, would give “an incomplete assessment” of its Bitcoin holdings The SEC disagreed. In a letter dated Dec. 3, the financial regulator asked MicroStrategy to remove it from future filings. Following that on Dec. 16, MicroStrategy responded it would comply.
MicroStrategy has been a known vocal advocate with regard to changing the rules of the current cryptocurrency accounting. In 2021, the firm shot a letter to the Financial Accounting Standards Board or FASB asking it to rewrite rules better that reflect the real value of cryptocurrencies.
FASB has remained unresponsive to calls for writing new rules for digital assets but heavy investments in the digital asset by MicroStrategy and Tesla Inc. have forced it to change its stance. In December, the board finally announced that it would start researching the issue.
MicroStrategy CEO- Never, no we’re not sellers
Despite a 40% drop in the value of Bitcoin, MicroStrategy CEO Michael Saylor in an interview revealed that he has no intention of selling his firm’s $5 billion worth BTC stash. Even if the king coin heads towards a lengthy bear market, Saylor told Bloomberg that he is a “Bitcoin bull” and stood firmly against cashing out BTC stating,
“Never. No. We’re not sellers. We’re only acquiring and holding Bitcoin, right? That’s our strategy.”
MicroStrategy became the first big corporation in the United States to acquire and hold Bitcoin as part of its balance sheet in August 2020. Since then, the business intelligence firm has acquired nearly 124,391 BTC worth about $5.2 billion at current market prices.