Strategy Posts $8.2 Billion Q2 Net Loss as Bitcoin Slump Cuts Holdings Value

Strategy (MSTR), the world’s largest corporate holder of Bitcoin, posted a net loss of $8.2 billion in the second quarter as a drop in the cryptocurrency’s price sharply reduced the value of its holdings.

Crypto media outlet CoinDesk reported on July 30 that Strategy released its second-quarter results that day. Most of the net loss stemmed from an $8.32 billion fair-value loss on its Bitcoin holdings.

As of July 26, Strategy held 843,775 Bitcoin, up 25% from the start of the year. At current market prices, those holdings are worth about $54.8 billion, far below the company’s total purchase cost of $63.7 billion.

Chief Financial Officer Andrew Kang said the company’s dollar reserves stood at $3.75 billion, enough to cover existing preferred stock dividends and interest obligations for more than two years.

Strategy raised $17.06 billion this year through at-the-market stock sales. It also repurchased $1.5 billion of convertible notes at an 8% discount. In addition, the company sold about $218.4 million of Bitcoin under a newly introduced Bitcoin monetization program to raise cash and fund preferred stock dividends. The sale marked a break from its previous strategy of accumulating Bitcoin without selling it.

Chairman Michael Saylor said the company is continuing to develop its business model even as sentiment in the Bitcoin market weakens and skepticism spreads. He added that Strategy is working to establish “digital credit” as a new asset class.

Strategy also created a $1 billion share buyback program for its common stock, MSTR, but has not yet made any purchases. Separately, it repurchased about $25 million of STRC preferred stock below par and said it plans to continue buying as long as the securities trade below par.