MicroStrategy purchases additional 7,002 Bitcoin in $414.4 million

The business data analytics firm has been investing in BTC since August 2020.

MicroStrategy purchases additional 7,002 Bitcoin in $414.4 million

Michael Saylor is the CEO of enterprise data analytics company MicroStrategy, reported on Monday via Twitter post and company filling that the firm acquired an additional 7,002 Bitcoin (BTC), worth around $414.4 million, at an average price of $59,187 per coin. MicroStrategy sold 571,001 shares of company stock between Oct. 1 and Nov 29 at $732.16 each, raising a total of $414.4 million in cash.

As of Monday, the company right now announced 121,044 BTC, worth up to $3.57 billion. It was acquired at an average price of $29,534 per coin and included capital appreciation from past coins.

In August 2020, MicroStrategy declared it would adopt Bitcoin as its treasury reserve asset, citing the digital currency being a "dependable store of value" an engaging investment with greater long-term profit potentials than holding cash. Likewise, the firm caused the unprecedented stimulus being printed by governments to combat COVID-19 as a catalyst for potential inflation and subsequent depreciation of fiat currency. Since then, MicroStrategy has almost consistently bought Bitcoin each and every quarter.

Normally, everyday investors endure losses when the price of Bitcoin goes down and gain when the price appreciates. However, that's not really the situation for MicroStrategy. As indicated by its earnings discussion transcript published last month, 

Phong le, president and chief financial officer of MicroStrategy, said that the company's Bitcoin holdings are classified as "indefinite-lived intangible assets under applicable accounting rules." This means that at any time subsequent to its acquisition, if the fair value, of market value, of the bitcoin, dips below its book value, the company will need to understand impairment costs. These impairment charges can then be used to legally offset its corporate income tax liability.

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