TLDR
- Strategy drops 17% as $17.4B loss contrasts rising STRC dividend
- Strategy boosts dividend while expanding 713K bitcoin treasury
- Massive accounting loss hits Strategy amid aggressive BTC buying
- STRC dividend hike meets record loss in Strategy earnings
- Strategy strengthens reserves as bitcoin bet continues
Strategy (MSFT) shares began the new reporting cycle with a sharp stock decline as MSTR closed at $106.99, down 17.12%. The company released a detailed fourth-quarter update that confirmed a major rise in its STRC dividend rate. The announcement also highlighted a substantial operating loss driven by fair value adjustments on bitcoin.
STRC Dividend Increase and Capital Structure Update
Strategy raised the STRC dividend rate to 11.25% as the instrument maintained stability near its stated value. The company noted that STRC reached a $3.4 billion aggregate size with consistent liquidity support. Moreover, the structure allowed continued return-of-capital distributions that are expected to last for at least ten years.
The firm strengthened its balance sheet with a $2.25 billion USD Reserve designed to provide 2.5 years of distribution coverage. This reserve secured payouts on preferred stock and interest obligations, thereby reducing near-term liquidity risks. Additionally, the company stated that it plans to maintain the reserve within a multi-year coverage range.
The firm also executed major capital raises across its ATM programs and preferred listings through late 2025 and early 2026. It generated $5.6 billion in the fourth quarter and added $3.9 billion more after the new year. These offerings expanded the company’s ability to scale its Digital Credit platform.
Quarterly Losses and Bitcoin Treasury Expansion
Strategy reported a fourth-quarter operating loss of $17.4 billion driven by unrealized digital asset losses under fair value rules. This figure contrasted sharply with the prior year due to different accounting requirements. However, the firm continued to expand its bitcoin position as part of its long-term treasury model.
The company reached 713,502 bitcoins by February 1, 2026, reflecting heavy acquisition momentum. It added 41,002 bitcoins in January 2026 and kept deployment aligned with its treasury plan. Furthermore, its bitcoin gain reached 101,873 BTC for 2025, supported by rising yields.
Bitcoin’s market value uplift supported a year-end asset value of nearly $60 billion. The average cost per bitcoin stood near $76,052 while market pricing exceeded $83,000. Therefore, the treasury position continued to carry embedded gains despite broader price weakness.
Software Revenue Trends and Updated Dividend Framework
Strategy posted fourth-quarter software revenues of $123 million, rising 1.9% year-over-year. Subscription services grew sharply as product support declined due to shifting demand patterns. Consequently, gross margin narrowed to 66.1% as revenue mix changed.
The firm updated its rules-based STRC dividend framework to maintain trading prices near the $100 stated amount. Monthly adjustments will follow the STRC VWAP range and apply rate increases or decreases accordingly. These recommendations remain subject to Board approval.
The company confirmed that all 2025 distributions on preferred equity qualified as return-of-capital for tax purposes. This treatment reduced shareholder basis while deferring taxable exposure. The firm expects ROC distributions to continue for an extended period across its Digital Credit products.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
