MicroStrategy’s earnings report shows that the company took a non-cash digital impairment charge of $917.8 million in the second quarter of 2022.
An impairment charge is a massive reduction or loss in the recoverable value of an asset.
MicroStrategy’s Bitcoin impairment charge reflects the decline in the price of Bitcoin compared to when MicroStrategy purchased it.
MicroStrategy had suffered a $170.1 million digital asset impairment charge in the first quarter of 2022.
When Bitcoin hit its all-time high of $68,000 per coin in November 2021, the total value of the MicroStrategy’s Bitcoin holdings was around $8 billion.
With Bitcoin trading at $23,000 per coin, those holdings would total about $2.9 billion.
The company has also acquired 421 Bitcoin at $20,000.
In another development Michael Saylor, who has served as the company’s CEO since its launch in 1989 has announced his transition to Executive Chairman.
Saylor is being replaced by Phong Le, formally President & Chief Financial Officer, who becomes Chief Executive Officer effective Monday.