tl;dr
Strategy, formerly MicroStrategy, reported a record $10 billion profit in Q2 driven by a rebound in Bitcoin value. The company, holding the largest Bitcoin reserve among publicly traded firms, saw revenue rise 3% year-over-year to $114.5 million. After a $5.9 billion loss in Q1 due to Bitcoin's pric...
Strategy, formerly MicroStrategy, announced a record $10 billion profit on Thursday, driven by a rebound in the value of its Bitcoin holdings during the second quarter. The Tysons Corner, Virginia-based company, known for holding the largest Bitcoin reserve among publicly traded firms, reported $114.5 million in revenue for Q2, marking a 3% increase year-over-year.
The significant profit reversal follows a challenging first quarter when Bitcoin’s price slump led to a $5.9 billion loss for the company. Bitcoin’s value dropped to $77,000 in Q1 but surged back to $111,000 in Q2, boosting Strategy’s treasury. The company also revealed plans to raise $4.2 billion through its newly introduced STRC perpetual preferred stock offering.
Michael Saylor, Strategy’s co-founder and Executive Chairman, highlighted positive regulatory developments as a major driver for cryptocurrencies. He referenced a comprehensive 150-page crypto policy report from the White House, noting strong government support for the crypto industry and the Bitcoin ecosystem.
Since starting its Bitcoin accumulation in 2020 and shifting away from software development, Strategy has amassed 628,800 Bitcoins valued at $74 billion. By the end of Q2, holdings increased nearly 20% quarter-over-quarter to 597,000 Bitcoins. The company pioneered the crypto treasury model, issuing shares at a premium relative to its Bitcoin assets and raising capital through corporate debt and preferred stock offerings specifically to fund Bitcoin purchases.
This year alone, Strategy issued several types of preferred stock and purchased about 21,000 Bitcoins after raising $2.5 billion through its STRC offering. It also announced a policy to halt issuing common stock unless its shares trade at more than a 2.5x premium to Bitcoin holdings or to cover interest and dividends for preferred shareholders.
After-hours trading saw Strategy’s shares rise 1.5% to $408, while Bitcoin’s price climbed 11% over the past month to $118,000, following a record high of $122,838 in July. Despite this, Strategy’s stock edged down 0.6% in the same period, a decline from its peak of $543 last year.
Looking ahead, Strategy plans to raise $42 billion in the next three years through equity and fixed income to continue its Bitcoin purchases. By Q1’s end, it had issued $21 billion in common stock and announced a further $21 billion issuance plan, reflecting its aggressive approach to growing its Bitcoin treasury.