Michael Saylor: Accounting rules coming into effect next year may allow MicroStrategy to meet S&P 500 profit requirements
on December 22nd, Barrons reported that Michael Saylor, chairman of MicroStrategy, did not explicitly say whether the company might be included in the SP 500 in a recent interview, but he said that given the optimistic outlook for Bitcoin, MicroStrategy may report quarterly net income of billions of dollars next year due to the increase in the value of Bitcoin holdings. The accounting rule changes that will take effect in 2025 may enable MicroStrategy to meet the profitability requirements for joining the SP 500.
It is reported that MicroStrategy's traditional software business (its main business before it started buying a large amount of Bitcoin in 2020) is relatively small and may be valued at only about $1 billion. In addition, according to GAAP (Generally Accepted Accounting Principles) calculations, the business is in a loss-making state, which alone is difficult to meet the inclusion requirements of the SP 500 index. The upcoming accounting rules will adjust the company's Bitcoin holdings from the current undervaluation to fair market value and may bring significant net income growth when Bitcoin prices rise. However, the SP Global Index Committee decides on SP 500 index members by invitation, reviewing profitability, market value, and other factors.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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