Michael Saylor: Accounting rules coming into effect next year may allow MicroStrategy to meet S&P 500 profit requirements

MicroStrategy Chairman Michael Saylor did not explicitly say in a recent interview whether the company may be included in the S&P 500, but he said that given the optimism about Bitcoin, MicroStrategy may report a number next year due to the increase in the value of Bitcoin holdings. Billion dollars in quarterly net income, and accounting rule changes set to take effect in 2025 could allow MicroStrategy to meet the profitability requirements to join the S&P 500. It is reported that MicroStrategy’s traditional software business (its main business before it started buying large amounts of Bitcoin in 2020) is small and may be valued at only about $1 billion. Additionally, the business is loss-making under GAAP (U.S. Generally Accepted Accounting Principles), which alone would make it difficult to qualify for inclusion in the S&P 500 Index. The accounting rules that will take effect soon will adjust the value of the company's Bitcoin holdings from the current low valuation to fair market value and could lead to significant net income growth if the price of Bitcoin increases. However, the S&P Global Indexes committee determines membership of the S&P 500 on an invitation-only basis, reviewing profitability, market capitalization and other factors.