By Michael Scott
Bitcoin giant MicroStrategy reports a $670.8M loss in the last quarter as it rebrands to Strategy.
Key Highlights
- Michael Saylor’s MicroStrategy earnings hit $120.7 million, though it incurred $670.8M in net loss, translating to $3.03 per diluted share.
- Nasdaq-listed MicroStrategy (MSTR) reinforces Bitcoin’s vision, eyeing a $10 billion BTC gain for 2025.
MicroStrategy paused its Bitcoin-buying spree, revealing its quarter-four loss surpassed $670 million. The US-based business intelligence firm disclosed that it would rebrand to Strategy during its Wednesday, February 5 announcement.
A reflection of Strategy’s corporate Bitcoin balance reveals the firm nearly doubled its sizable BTC holding within three months. Its operating expenses surged 693% year-over-year to hit $1.10 billion, translating to a $3.03 loss per diluted share.
Aggressive BTC Acquisition
The company has pursued an aggressive BTC acquisition steered by its executive chair, Michael Saylor. The vocal BTC advocate has overseen the Strategy to amass huge Bitcoin reserves to become the leading listed corporate holder.
Although it retains the software business, Strategy’s market presence and valuation are primarily linked to the crypto investments. The firm earnings dipped 3% to $120.7 million, which missed the projected estimates by $3 million. The downtrend was evident in its cash and cash equivalents by Dec. 31, 2024, which were $38.1M, $8.6 million off the 2023 mark.
The acquisition spree leaves Strategy with 471,107 Bitcoin balances worth $46.4 billion. The last quarter is the largest in Bitcoin holdings for Strategy. The fourth quarter marked its largest-ever increase in quarterly bitcoin holdings, following 218,887 BTC acquired for a cumulative $20.5 billion.
The company disclosed 74.3% BTC Yield, a metric it deploys to examine the performance of Bitcoin’s strategy. The measure illustrates the percentage period-to-period change within the BTC holdings and assumed diluted shares outstanding.
Reflecting on the Q3 earnings last October, the firm disclosed the 21/21 Plan, capping its target capital at $42 billion in three years. This was split equally among fixed-income securities and equity.
MicroStrategy Rebrands
Strategy chief executive Phong Le acknowledged the completion of $20 billion of the initial capital plan. This marks a significant achievement ahead of the initial timeline to lead in the digital transformation of capital.
The chief executive affirmed the firm’s well-positioning in 2025 as enhancing shareholder value. Le indicated that the Strategy will leverage the support from institutional and retail investors. This coincides with unveiling a $10 billion BTC gain for 2025 as its new KPI.
Per Le’s account, the BTC Gain shows the Bitcoins held at the onset of the period multiplied by the corresponding BTC Yield. Additionally, the company hinted at the debut of the convertible preferred Stock Strike on the Nasdaq under the STRK ticker.
The announcement clarified that a 10:1 conversion ratio of STRK to MSTR common stock will apply. Additionally, it will offer investors the embedded perpetual call option on the volatile large-cap stock.
The Le-led firm has ditched its previous plans to offer 2.5 million units of STRK shares. Its latest earnings report reveals an issuance of 7.3 million shares at $80 per unit. The report projects that STRK will grant an 8% fixed dividend yield, estimated to raise $563.4M in net proceeds.
Rebranding to Represent Bitcoin Standing
Michael Saylor’s company confirmed rebranding to Strategy, embracing orange as its color to represent energy, Bitcoin, and intelligence. The new logo captures a stylized B indicative of the company’s Bitcoin strategy and treasury firm.
During the release, the firm’s founder indicated that strategy is the most powerful and positive word in the human language. It is a representative of the company’s simplification of its strategic core.
Antoine de Saint-Exupery highlighted that perfection is realized when nothing exists to take away rather than nothing to add. The executive added that the new brand is representative of its pursuit of perfection after 35 years. The Strategy’s stock surged 500% in the past year, mainly from 12 weeks of BTC purchases. Its price could surge if Bitcoin regains bullish steam to set a new peak.