Key Points
- MicroStrategy, rebranded as Strategy, reported a $670M loss in Q4, largely due to Bitcoin.
- Despite the loss, the company continues to accumulate Bitcoin, reflecting belief in its long-term value.
Strategy, formerly known as MicroStrategy, has reported a significant impairment loss of $670 million in the fourth quarter, largely attributed to Bitcoin.
Despite this, the company continues to accumulate Bitcoin, indicating its faith in the cryptocurrency’s long-term value.
Rebranding and Bitcoin Accumulation
Strategy announced its official rebranding on February 5, along with a new logo featuring a stylized “B”. This symbolizes the company’s position as the world’s largest corporate holder of Bitcoin.
This rebranding coincides with the company’s fourth consecutive quarterly loss and a greater focus on Bitcoin accumulation.
The company’s latest earnings report, also released on February 5, revealed a net loss of $670.8 million for Q4 2024, amounting to $3.03 per share. This is a stark contrast to the profit of $89.1 million, or 50 cents per share, reported a year earlier.
These losses were primarily driven by a $1.01 billion impairment charge on Bitcoin holdings, a significant increase from $39.2 million recorded in the same quarter of the previous year.
However, this will be the last time such impairment charges affect earnings. Starting from Q1 2025, Strategy will adopt new fair-value accounting rules.
Strategy’s Bitcoin Holdings and Future Plans
Despite these financial setbacks, Strategy continues to aggressively expand its Bitcoin holdings. In Q4 alone, the company made its largest-ever Bitcoin purchase, acquiring 218,887 BTC for $20.5 billion.
As of now, Strategy holds 471,107 BTC, valued at approximately $46 billion. The latest addition to its treasury occurred on January 27, when it bought 10,107 BTC worth around $1.1 billion.
Strategy’s relentless Bitcoin buying spree has boosted its stock over the past year, with shares climbing nearly five-fold in 2024. This earned the company a spot in the Nasdaq 100 index in December.
However, investor sentiment around the latest earnings was less enthusiastic. On February 5, MSTR shares fell 3.33%, closing at $336.7, though the stock remains up over 12% year-to-date.
The company is also shifting its approach to financing its Bitcoin strategy. CEO Phong Le stated that in 2025, Strategy will place more emphasis on fixed-income financing, including convertible bonds and preferred stock.
Last year, the company set an ambitious goal to raise $42 billion over three years to fuel its Bitcoin acquisitions, with $20 billion already secured.
There has been a slight change in how the company acquires Bitcoin. On February 3, executive chairman Michael Saylor announced that, for the first time in 12 consecutive weeks, Strategy had not sold any shares to finance Bitcoin purchases between January 27 and February 2.
Despite this temporary shift in approach, the company remains committed to increasing its Bitcoin reserves over time.