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Strategy Stock (MSTR) fell 17% on Thursday before taking another 1% hit after hours after its fourth-quarter earnings were released.
The software company led by Michael Saylor pioneered the model for companies to accumulate bitcoins in corporate treasuries. These days, it sees itself as an investment intermediary for bitcoin, with that side of the business becoming its organizing principle.
The gambit seemed to work last year as bitcoin moved higher and higher in hopes of easier regulation. But like the sale in bitcoins intensified on Thursday, highlighted risks to Strategy’s long-term equity strategy that could make it difficult for the company to raise capital.
The strategy is currently maintained 713,502 bitcoins with an average purchase price of $76,052. On Thursday, the spot price of bitcoin fell to around $63,000, bringing the company’s unrealized losses to around $8.9 billion.
“HODL,” Saylor tweeted Thursday, referring to a buzzword in the crypto community that has evolved to mean “wait for life.”
For the fourth quarter, Strategy reported an operating loss of $17.4 billion, compared to an operating loss of $1 billion in the fourth quarter of 2024.
It also reported a net loss of $12.4 billion, or $42.93 per share, well below the $5.5 billion loss to $6.3 billion profit range the company indicated in December, when it cut its forecast for net profit of $24 billion. The Street expected a loss of $20.99 per share.
In Software Operations, revenue increased 1.9% year-over-year to $123 million, driven by strong growth in product licensing and subscription services.
In December, Strategy also built a $2.25 billion US dollar reserve, which the company says provides more than two and a half years of funds to cover its dividend. Commenting on the booking, CFO Andrew Kang said the “strategy’s capital structure is stronger and more resilient today than ever before.”
