MicroStrategy shares drop on bitcoin’s slide, SEC rejection of company’s crypto accounting

MicroStrategy shares drop on bitcoin’s slide, SEC rejection of company’s crypto accounting

Shares of tumbled 17.8% Friday afternoon after the U.S. Securities and Exchange Commission reportedly rejected the company's bitcoin accounting strategy. The business-intelligence software company's stock had been falling in tandem with the price of , which to its lowest point since August. MicroStrategy shares are down 24.7% for the week. A filing released Thursday showed the SEC rejecting the accounting method MicroStrategy was using for bitcoin in its earnings reporting. "We note your response to prior comment 5 and we object to your adjustment for bitcoin impairment charges in your non-GAAP measures," the filing said. "Please revise to remove this adjustment in future filings." MicroStrategy began buying bitcoin as part of a capital allocation strategy in 2020, setting it apart from other companies. It has been aggressively buying bitcoin ever since, making its shares a proxy for the cryptocurrency. As of the end of 2021, MicroStrategy held 124,391 bitcoins, acquired for roughly $3.75 billion at an average price of about $30,159 per bitcoin, CEO Michael Saylor .