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MicroStrategy may explore “future revenue generation opportunities” on 95,643 BTC holdings

Business intelligence firm MicroStrategy said it will explore revenue generation opportunities on 95,643 “unencumbered” bitcoin (BTC) held by its subsidiary MacroStrategy.

In MicroStrategy’s Q1 2022 report released on Tuesday, the company said it “may conservatively review future revenue generation opportunities on unencumbered MacroStrategy bitcoins” in exchange for a $205 million BTC-backed loan , issued by Silvergate Bank in March. As of March 31, MicroStrategy held a total of 129,218 BTC, which the company said had a book value of approximately $2.9 billion, reflecting cumulative impairment losses of more than $1 billion and total costs of $4 billion.

“MicroStrategy’s original cost base and market value of Bitcoin were $3.967 billion and $5.893 billion, respectively, reflecting an average cost per bitcoin of approximately $30,700 and a market price per bitcoin of $45,602.79, respectively ‘ the company said.

According to the report, 95,643 BTC of MacroStrategy’s crypto holdings are “unencumbered” as of March 31, with 19,466 BTC held by the subsidiary pledged as collateral — approximately $820 million at the time of the transaction — for a 205 -Million dollar loan from Silvergate. The remaining 14,109 BTC were held directly by MicroStrategy.

MicroStrategy reported revenue of $119.3 million for the first quarter of 2022, down 3% year over year. Additionally, the company’s non-generally accepted accounting principles (GAAP) totaled $275 million in the first quarter, including $170 million from BTC impairments. The United States Securities and Exchange Commission reportedly sent a letter to MicroStrategy in January asking the company to stop using non-GAAP methods to calculate its financials.

Related: The MicroStrategy subsidiary adds another 4,197 BTC to the balance sheet

Since investing $250 million in Bitcoin in August 2020, MicroStrategy now holds billions of dollars in crypto after separate purchases using the company’s cash and proceeds from the sale of convertible senior notes in private offerings to institutional buyers. BTC is priced at $37,787 at the time of publication, valuing the company’s 129,218 coins at around $4.9 billion.