Strategy stock (MSTR) fell 17% on Thursday and then fell another 1% in the after-hours following the release of fourth-quarter earnings.
The software company led by Michael Saylor pioneered the model for businesses to hoard Bitcoin in corporate coffers. Today, it is considered an investment agent for Bitcoin, and this aspect of the business becomes its organizing principle.
This strategy seemed to work last year, when Bitcoin continued to move higher on the back of looser regulations. But as the Bitcoin sell-off intensified on Thursday, it highlighted the risks of Strategy’s long-term holding strategy, which could make it more difficult for the company to raise capital.
Strategy currently holds 713,502 Bitcoins at an average purchase price of $76,052. Bitcoin spot prices fell to around $63,000 on Thursday, bringing the company’s unrealized losses to about $8.9 billion.
“HODL,” Thaler wrote on Twitter on Thursday, referring to a tongue-in-cheek term in the cryptocurrency community that has evolved to mean “hold on for dear life.”
Strategy reported an operating loss of $17.4 billion in the fourth quarter, compared with an operating loss of $1.0 billion in the fourth quarter of 2024.
The company 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 it said in December, when it slashed its net profit forecast from $24 billion. Wall Street expected a loss of $20.99 per share.
In the software business, revenue increased 1.9% year-on-year to $123 million, driven by strong growth in product licensing and subscription services.
In December, Strategy also established U.S. dollar reserves worth $2.25 billion, which the company said could provide more than two and a half years to fund dividend payments. Commenting on reserves, Chief Financial Officer Andrew Kang said: “Strategy’s capital structure is stronger and more resilient today than ever before.”
Listen to Strategy’s live earnings call on the Stock Quotes page.
