MicroStrategy changes its name and reshapes its brand. Its financial report reveals continued losses, but there may be a large amount of unrealized Bitcoin income tax in 2025

MicroStrategy, a self-proclaimed Bit company, announced that it will expand its brand business under the name "Strategy", utilizing the Bit logo and orange brand colors, including a stylized B that symbolizes the company's Bit strategy and its unique position as a Bit financial company. MicroStrategy reported a loss of $1 billion in Q4 2024 and recognized a digital asset impairment of up to $1 billion. However, the company stated that starting in 2025, the new accounting standards will result in up to $12.7 billion in unrealized Bit gains.

Rebranding and Merchandising

Founder Michael Saylor stated during the rebranding announcement: "Strategy is one of the most powerful and positive words in the human language. It also represents the simplification of our company name to its most essential strategic core. After 35 years of development, our new brand perfectly represents our pursuit of perfection."

MicroStrategy has also created a merchandise website, selling various products featuring the company's new LOGO, such as T-shirts priced at $36 and water bottles priced at $26.75.

MicroStrategy's Q4 Loss of $1 Billion

MicroStrategy reported a loss of $1 billion (Income from Operations) in Q4.

MicroStrategy recognized a digital asset impairment of up to $1 billion and did not use fair value to recognize the value of Bit, so despite Bit approaching $100,000, it was not reflected in MicroStrategy's financial statements.

$12.7 Billion in Unrealized Bit Gains in 2025

However, in the financial report, MicroStrategy also announced that it will apply new accounting standards starting in 2025, which will result in up to $12.7 billion in unrealized gains.

It was previously reported that MicroStrategy may be subject to a tax rate of up to 15% due to the "Corporate Alternative Minimum Tax (CAMT)" in the Inflation Reduction Act.

(The Wall Street Journal: MicroStrategy May Owe Billions in Bit Unrealized Gain Tax)

Since MicroStrategy has always emphasized that it will not sell its Bit holdings, it must find other ways to pay the taxes. According to reports, Strategy and Coinbase both wrote to the IRS in January, requesting an exemption from the Corporate Alternative Minimum Tax.

Increased Likelihood of Issuing Bonds

According to its "21/21 Plan", the goal is to increase capital by $42 billion over the next three years (starting October 30, 2024), including $21 billion in equity and $21 billion in fixed-income securities, which will further support its acquisition of Bit as part of its reserve asset strategy.

So far, MicroStrategy has issued $16.7 billion in stock, $3 billion in convertible bonds, and nearly $600 million in preferred stock (which MicroStrategy classifies as fixed-income).

This suggests that the likelihood of MicroStrategy issuing more stock in the future has significantly decreased, while the fixed-income capacity remains high at $17.4 billion.