TLDR
- Strategy suffered a $12.4 billion quarterly loss as Bitcoin collapsed 22% from its October peak of $126,000 to $88,500
- Shares dropped 17% to $107 on Thursday while Bitcoin hit $62,500, putting the company’s 713,502 BTC holdings 17.5% below cost
- The firm’s average Bitcoin purchase price stands at $76,052 versus the current $64,500 market price
- Strategy holds $2.25 billion cash covering 30 months of dividends with zero debt maturing before 2027
- Management emphasized 13% net leverage ratio remains lower than typical S&P 500 companies despite convertible debt load
Strategy just reported one of its worst quarters ever. The company posted a $12.4 billion net loss in Q4 2025 as Bitcoin crashed from $126,000 to $88,500.
Things got worse in the new year. Bitcoin has dropped 30% year-to-date to $64,500. That’s a full $11,500 below what Strategy paid on average.
MSTR shares tanked 17% Thursday to close at $107. Bitcoin touched $62,500 during the session before recovering slightly.
The company sits on 713,502 Bitcoin worth about $46 billion today. Every coin shows a paper loss based on the $76,052 average purchase price.
Strategy’s software division posted modest gains. Business intelligence revenues climbed 1.9% to $123 million in Q4. But crypto losses swallowed those gains whole.
Management Downplays Concerns
CFO Andrew Kang struck a defiant tone in the earnings statement. He insisted the capital structure has never been stronger.
Kang described Strategy’s holdings as a “digital fortress” of Bitcoin. He referenced the company’s move toward “Digital Credit” aligned with indefinite Bitcoin ownership.
CEO Phong Le got straight to the point on the analyst call. “I’m not worried, we’re not worried, and no, we’re not having issues.”
Le argued Strategy’s enterprise value exceeds its $45 billion Bitcoin reserve. He pointed out the $8.2 billion in convertible debt equals just 13% net leverage.
Most S&P 500 firms carry higher leverage ratios. Le used this comparison to counter worries about Strategy’s debt burden.
Balance Sheet Provides Flexibility
Strategy ended the quarter with $2.25 billion in cash reserves. That pile covers 30 months of preferred stock dividends and interest obligations.
The company doesn’t face any major debt payments until 2027. This timeline removes pressure to dump Bitcoin at unfavorable prices.
The breathing room matters as markets stay volatile. Strategy can wait out the downturn without forced liquidations.
Executive Chairman Michael Saylor has preached a buy-and-hold forever strategy. The company kept buying Bitcoin even after Q4 closed.
Those additional purchases are baked into the $76,052 average cost. Strategy bought billions more Bitcoin as prices slid lower.
The gap between cost and market value now sits at $11,500 per coin. That translates to roughly $8 billion in unrealized losses across the portfolio.
The 5 PM ET earnings call drew heavy investor attention. Market participants wanted clarity on Strategy’s plans while Bitcoin trades deep below break-even levels and volatility remains high across crypto markets.
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