Strategy Posts $12.5bn Q1 Loss Following Bitcoin Swings

The firm posted a net loss of $12.5bn, or $38.25 per share, largely due to a $14.5bn unrealised loss on its Bitcoin holdings. That compares with a loss of $4.22bn, or $16.49 per share, in the same period last year.

Overall, the share loss earnings came in below Yahoo Finance's average analyst expectations ($18.98 per share loss). Revenue was also a miss, coming in at $120.7mn for the quarter (forecast: $125m).

Buying continues 

Strategy now holds 818,334 BTC, up 22% year-to-date, with a cost basis of about $61.8bn and a market value around $64.1bn. The company also reported a 9.4% BTC yield this year – an internal metric the company uses to measure how effectively it is increasing Bitcoin exposure per shareholder.

Strategy is the largest corporate holder of Bitcoin, and its aggressive accumulation strategy has become a blueprint for newer digital asset treasury (DAT) firms.

According to the report, the company has raised $11.7bn so far this year to fund BTC purchases, including $5.6bn through its STRC preferred stock. It brought in about $7.4bn during the quarter alone, largely from stock sales.

"STRC has scaled to $8.5bn in just nine months and is now the largest preferred stock by market cap in the world," said Michael Saylor, founder and executive chair of Strategy. "By extracting Bitcoin's performance and engineering price stability, we have produced a credit instrument with a 2.53 Sharpe ratio. This has sparked a broader Digital Credit ecosystem, with $150mn of STRC held in corporate treasuries."

Market reaction

Following the Q1 report's release, Bitcoin traded at around $81,624, up 2% on the day, adding to its weekly gains, which now stands at 7%. During the quarter, however, Bitcoin's price fell about 7%. 

Meanwhile, shares of Strategy closed at $186.90 ahead of the results, up 1.6% on the day, before falling 3% to $181.02 in after-hours trading at 23:10 UTC.