Regulatory documents submitted by this enterprise software giant reveal a significant discrepancy between its financial situation and its public claims. Although it claimed to have earned nearly $1.7 billion from Bitcoin investments this year, the digital assets it holds are actually suffering from unrealized losses amounting to several billion dollars.

Under the fair value accounting standards implemented in January 2025, market fluctuations must be directly reflected in the income statement. As a result, on March 31, the book value of the company’s Bitcoin holdings was reduced from $58.85 billion to $51.65 billion. Consequently, by the end of the first quarter, the total cost of these holdings amounted to $58.02 billion, while their actual market value, calculated at the then-market price of $71,192 per Bitcoin, was only $54.6 billion. This means that the holding cost was approximately $3.41 billion higher than the current market value.

It is worth noting that, according to Monitored by Woofun AI, despite this book loss, the institution has not slowed down its Bitcoin purchasing efforts. Since the beginning of the year, it has purchased more than 94,000 Bitcoins, which is equivalent to 2.2 times the total amount newly mined across the entire network during the same period, bringing its total holdings to 766,970 Bitcoins.

Management emphasizes the changes in earnings per share using a custom-defined “Bitcoin yield” indicator, claiming that this yield reached 3.7% this year and resulted in an additional 24,675 Bitcoins, thereby proving the effectiveness of its leverage accumulation strategy to the market. However, this marketing approach deliberately ignores the preferential rights of preferred stockholders in liquidation as well as the company’s massive debt burden.

The annual report clearly states that its software business will not be able to generate sufficient cash flows within the next 12 months to cover its financial obligations. As long as the capital market is willing to purchase its shares at a reasonable valuation, the institution will be able to continue using equity financing to sustain its massive Bitcoin purchasing activities. Otherwise, if financing channels tighten or Bitcoin prices fall below the cost level, the liquidity risks associated with selling assets will become apparent.