Strategy Reports Fourth-Quarter Net Loss
Strategy (MSTR) reported a fourth-quarter net loss of $3.03 per share, compared to income of $0.50 per share a year earlier.
Impairment Charge on Bitcoin Holdings
The loss incurred as the company took an impairment charge on its 471,107 token bitcoin (BTC) holdings. Those holdings are worth more than $45 billion at bitcoin’s current price just above $97,000.
Targeting Dollar Gain on Bitcoin Holdings
For 2025, Strategy is targeting a dollar gain of $10 billion on its bitcoin holdings.
Recent Events
It’s been an extremely eventful week for Strategy prior to the earnings, including an upsizing in the company’s preferred stock offering and a name change just hours ago.
New Fair Value Accounting Rule
The Financial Stability Accounting Board (FASB) last year implemented a new fair value accounting rule for corporates holding digital assets. Use of the rule was voluntary through the end of 2024, but will be required beginning in the first quarter of this year.
After-Hours Trading
Shares are down marginally in after-hours action. They fell a bit more than 3% in regular trade today as bitcoin dipped to the $97,000 level.
Conclusion
Strategy’s fourth-quarter earnings report highlights the challenges the company faces in managing its significant bitcoin holdings. The impairment charge taken on its bitcoin holdings resulted in a net loss, and the company is targeting a dollar gain on its bitcoin holdings in 2025. The new fair value accounting rule implemented by FASB will also impact the company’s financial reporting going forward.
FAQs
Q: What was Strategy’s fourth-quarter net loss?
A: Strategy reported a fourth-quarter net loss of $3.03 per share.
Q: What was the reason for the net loss?
A: The company took an impairment charge on its 471,107 token bitcoin (BTC) holdings, which resulted in a loss.
Q: What is Strategy’s target for dollar gain on its bitcoin holdings in 2025?
A: The company is targeting a dollar gain of $10 billion on its bitcoin holdings in 2025.
Q: What is the new fair value accounting rule implemented by FASB?
A: The new fair value accounting rule requires corporates holding digital assets to use a fair value accounting method for their financial reporting. The rule was voluntary through the end of 2024, but will be required beginning in the first quarter of this year.
Q: How did Strategy’s shares perform in after-hours trading?
A: Shares were down marginally in after-hours action, following a 3% decline in regular trade today as bitcoin dipped to the $97,000 level.
