Strategy $MSTR ( ▲ 6.07% ) just delivered a brutal quarter as its massive bitcoin position turned into a giant paper loss during the latest crypto crash. The company missed earnings expectations, and while shares were only slightly lower after hours, they had already plunged hard during regular trading as bitcoin $BTC tumbled to levels not seen since 2024.
The stock is now down nearly 70% over the past year, showing just how painful the ride has been for investors tied to the corporate bitcoin trade.
Software Stable, Bitcoin Not So Much
Strategy’s legacy software business actually held up decently, with revenue of $122.8 million coming in a bit above expectations. But that was overshadowed by a massive earnings loss, with diluted EPS of negative $42.93 versus expectations for only a small loss.
The real damage came from bitcoin. The company bought its holdings at an average price of about $76,000 and is now sitting on billions in unrealized losses. Its operating loss for the quarter included a $17.4 billion unrealized hit tied to its digital assets, a huge jump from the prior year.
Underwater but Not Under Pressure Yet
Strategy now trades below the value of its bitcoin holdings, dipping under 1x mNAV, which means the market is valuing the company at less than the net value of its crypto. That has investors questioning how much premium, if any, the strategy deserves going forward.
Still, analysts note that the company is not facing margin calls or forced liquidations. Its bitcoin is not pledged as collateral, and major debt maturities are still some time away. Strategy also has several financial levers it could pull, including refinancing or issuing equity if conditions improve.
For now, though, Strategy’s story remains tightly chained to bitcoin’s price. And with crypto lacking clear catalysts, that link is feeling more like a weight than a rocket booster.