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Strategy reports a $6.5 billion loss on BTC while maintaining a trading premium over its asset value.
Ahead of the fourth-quarter earnings report tonight, shares are down another 13% as bitcoin falls back to $68,000.
Strategy nursing $6.5 billion bitcoin loss (Danny Nelson, modified by CoinDesk)
What to know:
- Strategy’s loss on its bitcoin assets has risen to $6.5 billion.
- Shares continue to decline but are still trading at a minor premium compared to the company’s BTC holdings.
- Michael Saylor and his team may keep issuing common stock to acquire more bitcoin, without this necessarily diluting shareholders.
Strategy (MSTR), the largest publicly traded corporate owner of bitcoin , is experiencing a swift increase in losses related to its substantial holdings.
The firm currently possesses 713,502 BTC at an average purchase price of $76,052. With the current spot bitcoin price near $67,000, this results in an unrealized loss of nearly $6.5 billion, equating to about 12% in relation to that average acquisition cost.
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Read more: Michael Saylor’s bitcoin stack is officially underwater, but here’s why he likely won’t reach for the panic button
MSTR shares are down approximately 13% today, marking Thursday as the most significant single-day drop in nearly a year. The stock has now decreased by 66% year-over-year and is nearly 80% lower than its peak reached shortly after Donald Trump’s election victory in November 2024.
Despite this substantial decline, Strategy continues to trade at a slight premium to the value of the bitcoin on its balance sheet, known in the industry as an mNAV (multiple of net asset value) exceeding one — currently around 1.09. This indicates that Michael Saylor and his team have the ability to keep issuing common stock to acquire more bitcoin without negatively impacting shareholders.
The company is set to release its fourth-quarter earnings after the market closes on Thursday evening. No unexpected developments are anticipated in the results, but investors will likely be keen to hear Saylor’s insights, given the prevailing market anxiety.
In the meantime, STRC, Strategy’s perpetual preferred equity instrument, which is presented as a high-yield, high-credit, money-market-style product, is trading around $95, below its $100 par value. Should STRC not return to par by the end of the month, the dividend rate is expected to increase by an additional 25 basis points to 11.5%.
The only other similar perpetual preferred equity currently available is Strive’s (ASST) SATA, which is down roughly 4% at $86 and would also likely necessitate a dividend hike to regain par. Strive’s common equity, ASST, is down about 11% for the day, trading near $0.52 per share.
