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MicroStrategy’s Accounting Changes Could Impact Share Price and S&P 500 Eligibility

MicroStrategy’s Accounting Changes Could Impact Share Price and S&P 500 Eligibility

Amid Bitcoin's cooldown after its recent rally, prominent crypto analyst Michaël van de Poppe suggests that Bitcoin's dominance in the market has reached a peak, signaling a potential shift towards altcoins.

Benchmark issued an investment note earlier this week, highlighting the potential impact on MicroStrategy’s share price and eligibility for the S&P 500 index if it adopts new accounting rules.

Currently, MicroStrategy uses ASC 350, leading to negative effects on its earnings during quarters when the value of its Bitcoin holdings decreases.

Several companies holding Bitcoin have already adopted the new ASU 2023-08 guidance to qualify for the S&P 500. However, MicroStrategy might report losses in Q1 2024, despite efforts to meet inclusion criteria. The decision to adopt early remains uncertain, with divergent investor views.

READ MORE: Iconic ‘Buy Bitcoin’ Sign Auctioned for Over $1 Million

MicroStrategy’s Executive Chairman, Michael Saylor, criticized the FASB’s current model as “punitive” and advocates for new accounting guidance to better reflect its Bitcoin holdings’ value.

Should MicroStrategy adopt FASB’s new standard, it could announce a gain exceeding $300 per share for Q1 2024, according to Benchmark. Since August 2020, MicroStrategy’s stock surged tenfold, outperforming BTC, major indices, gold, and tech stocks.

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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