Michael Saylor: Next Year's Upcoming Accounting Rule Change May Allow MicroStrategy to Meet S&P 500 Earnings Requirement

BlockBeats News, December 22nd, according to Barrons, MicroStrategy's Chairman Michael Saylor did not clearly indicate in a recent interview whether the company may be included in the S&P 500. However, he stated that given his optimistic view on Bitcoin, MicroStrategy may next year report quarterly net income of billions of dollars due to the increase in the value of its Bitcoin holdings. The accounting rule changes set to take effect in 2025 may enable MicroStrategy to meet the profit requirements for joining the S&P 500.

Reportedly, MicroStrategy's traditional software business (its main business before heavily purchasing Bitcoin in 2020) is relatively small in scale, with a valuation of only about $1 billion. In addition, this business is currently in a loss position according to GAAP (Generally Accepted Accounting Principles), making it difficult to meet the inclusion requirements of the S&P 500 index. The upcoming accounting rules will adjust the company's Bitcoin holdings from the current undervaluation to fair market value and may result in significant net income growth during Bitcoin price increases. However, the S&P Global Index Committee operates on an invitation basis to determine S&P 500 index membership, reviewing profitability, market capitalization, and other factors.