The company currently meets all eligibility criteria except one: achieving positive Generally Accepted Accounting Principles (GAAP) net income over the trailing 12 months.
To qualify, Strategy’s Q1 2025 earnings must offset losses from the previous three quarters—a goal now more attainable thanks to the adoption of the Financial Accounting Standards Board (FASB) digital asset accounting rule.
The FASB rule, now mandatory, requires companies to recognize Bitcoin holdings at fair value, allowing price gains to flow through to the bottom line. Previously, companies like Strategy had to account for Bitcoin at its lowest value, leading to significant impairment losses. For example, in Q4 2024, Strategy valued its Bitcoin at less than US$16,000 per token, resulting in a US$1 billion impairment loss despite Bitcoin closing the year near US$94,000.
According to an analysis by Richard Hass on X, Strategy needs Bitcoin to close Q1 2025 above US$96,337 to achieve positive trailing 12-month earnings.
⭕️ $MSTR ‘Strategy’ FASB / S&P500 Inclusion Update
🧐 TLDR:
PER 24Q4 EARNINGS, STRATEGY IS ELIGIBLE FOR SPX IF BTC IS >$96,374 ON MARCH 31, 2025 WITHOUT ACQUIRING ANY MORE BITCOIN.—————————-
✅The Facts:
Post 24Q4 Earnings we can now calculate the… https://t.co/4LJYbY3loz pic.twitter.com/pJInv95eSY
— Richard Haas (@RichardAHaas) February 6, 2025
“Based on MSTR current treasury of 471,107 BTC the required BTC price on March 31 to achieve this is $96,374,” Hass wrote on Feb. 7.
Strategy has expanded its treasury to 478,740 BTC since.
“The more bitcoin Strategy acquires in Q1, the lower the Mar 31 bitcoin price target becomes,” Hass continued.
“If MSTR acquires 100,000 BTC in Q1 the target BTC price drops to $95,960.”
Benchmark analyst Mark Palmer was quoted by Coindesk as saying that Strategy’s adoption of the FASB rule strengthens its case for S&P 500 inclusion.
“Given its outperformance of every current index constituent over four years, exclusion would be surprising,” Palmer said.
Palmer added that while joining the Nasdaq-100 was significant, “the S&P 500 is the holy grail,” as inclusion would validate Strategy’s Bitcoin strategy and expose S&P 500 index funds to Bitcoin indirectly.
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