Strategy Posts $12.5B Loss, Weighs First-Ever Bitcoin Sale

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•  06 May 2026
 

$MSTR Strategy recorded a net loss of $12.5 billion in the first quarter of 2026, driven primarily by an unrealized accounting loss of more than $14 billion on its bitcoin holdings. The loss per share reached $38.25, compared with $16.49 in the same period a year earlier. Software revenue, the company's legacy business, rose roughly 12 percent to $124.3 million, though the market has long ceased to price Strategy as a software company. Institutional flows and positioning in the stock remain almost entirely a derivative of bitcoin price movement.

As of early May, Strategy held more than 818,000 bitcoin with a market value of approximately $64 billion, representing roughly 22 percent growth in coin count since the start of the year. The company raised more than $7 billion in the first quarter through common stock and STRC preferred share offerings, with an additional $4 billion raised via an at-the-market program in the current quarter. Annual interest and dividend obligations have climbed to approximately $1.5 billion, a 68 percent increase in just three months, a direct consequence of the accelerating capital raise cadence. The STRC preferred instrument, carrying no fixed maturity and a variable dividend designed to anchor its price near $100, has become the central financing mechanism enabling earnings momentum on the bitcoin accumulation side.

The company holds roughly $2.25 billion in cash reserves, which management calculates covers at least 18 months of current fixed obligations. A portion of Strategy's convertible debt is now trading well below its conversion price, creating a potential liability of approximately $5 billion in repayments beginning in 2028. The combination of rising fixed costs, below-water converts, and concentrated bitcoin exposure tightens the margin for error on multiple expansion assumptions embedded in the current share price.

For the first time, management softened its absolute no-sell stance on bitcoin. CEO Phong Le stated the company would be willing to sell a portion of its holdings if doing so served financing needs or assisted in managing dividend payments, while maintaining that increasing bitcoin per share over time remains the primary objective. Chairman Michael Saylor acknowledged that selective sales are possible as long as annual bitcoin appreciation or capital raise rates exceed approximately 2.3 percent, which he argued would allow partial coin sales without reducing the aggregate bitcoin balance. Management further estimated the current model could support accumulation of up to 144,000 additional bitcoin per year through a combination of equity issuance, leverage, and limited existing coin sales, a framing that echoes a real estate developer recycling assets to expand a portfolio.

The next key condition to watch is whether STRC holds near its $100 par value under sustained bitcoin weakness, as a sustained discount would constrain the company's primary low-cost financing channel and force a reassessment of acquisition pace heading into the 2028 convertible debt maturity wall.

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