MicroStrategy, now known as Strategy, holds the largest bitcoin treasury among public operating companies. Investment bank KBW has initiated coverage on Strategy with an outperform rating and a $560 price target. The shares were trading at around $329, up 1% in early trading. Strategy, co-founded by Michael Saylor, will adopt the Financial Accounting Standards Board’s updated accounting treatment for bitcoin holdings in Q1 2023. This shift will move from an outdated measurement approach to fair value accounting, allowing unrealized gains/losses to flow to net income. Previously, the company reported a $1 billion impairment loss in Q4 2024 due to not adopting these new rules. One key criterion for S&P 500 inclusion is positive net earnings in the last quarter and the sum of the previous four quarters. Strategy has various tools to expand its bitcoin holdings and potential to generate yield from on-chain applications built on the Bitcoin network.
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