Key Takeaways:
Strategy, the corporate Bitcoin treasury company formerly known as MicroStrategy, reported a net loss of $8.22 billion for the second quarter of 2026, reversing net income of $10.02 billion a year earlier, and is now weighing the sale of up to $5 billion in Bitcoin to fund reserves, preferred dividends, and share buybacks.
"Our USD Reserve currently stands at $3.75 billion, which is enough to cover our existing preferred dividend payments and interest obligations for more than 2.1 years," Andrew Kang, chief financial officer at Strategy, said on the earnings call.
The loss was driven almost entirely by an $8.32 billion unrealized markdown on the company's Bitcoin holdings under fair-value accounting, as BTC fell from roughly $84,000 at the start of the quarter to $62,592 at the time of reporting, down 2.5 percent over 24 hours. Revenue from the software segment rose 6.9 percent year over year to $122.4 million, with gross profit of $81.6 million at a 66.6 percent margin. The company reported a loss per share of $24.45, versus earnings of $32.60 per share in Q2 2025.
Strategy held 843,775 BTC as of July 26, valued at approximately $54.77 billion against a cost basis of $63.69 billion, or an average acquisition price near $75,476 per coin. The company sold 3,588 BTC in early July — its first-ever Bitcoin sale — generating roughly $226 million to fund preferred stock dividends and build its dollar reserve. Management has authorized the monetization of up to $1.25 billion in additional Bitcoin, and reports suggest the company could sell as much as $5 billion to cover reserves, dividends, and buybacks.
The capital structure is now the story, not just the Bitcoin price
The mNAV (modified net asset value) ratio — the price of MSTR shares relative to the value of the company's Bitcoin holdings — has compressed to roughly 1.0, meaning shares trade near the value of the underlying BTC. This compression reduces Strategy's ability to issue new shares at a premium to buy more Bitcoin, a core pillar of the Saylor playbook. The company raised $8.41 billion through at-the-market programs during Q2 and another $1.28 billion in preferred stock through July 26, but preferred dividends have risen to 12 percent, and STRC preferred shares trade below their $100 face value.
Strategy reduced convertible debt by 18 percent to $6.7 billion and repurchased $1.5 billion of convertible notes at an 8 percent discount. The company also authorized a $1 billion share repurchase program for MSTR common stock and bought back approximately $25 million of STRC preferred shares at a discount to stated value.
What happens next depends on the September 30 BTC price
The key catalyst for Q3 is the price of Bitcoin on September 30, which will determine the next round of unrealized gains or losses under fair-value accounting. Every $10,000 increase in Bitcoin's price adds roughly $8.4 billion to the value of Strategy's 843,775-coin portfolio. Management reported a 4.5 percent year-to-date BTC Yield, a BTC Gain of 29,997, and an illustrative BTC Dollar Gain of $1.95 billion — metrics designed to track Bitcoin accumulation per diluted share rather than cash earnings.
The potential $5 billion Bitcoin sale creates a supply overhang that could pressure BTC prices further, even though the 3,588 coins sold in July represented just 0.4 percent of holdings. Bitcoin traded at $62,592 with a market cap of roughly $2.23 trillion, down 28 percent year to date. The iShares Bitcoin Trust (IBIT) fell 4 percent to $35.37 in lockstep with the coin, while Coinbase dropped 15 percent to $139.55 after posting a wider-than-expected Q2 loss of $359 million.
For investors, the question is no longer whether Saylor will keep buying Bitcoin — it's whether the capital structure can sustain preferred dividends, debt service, and share buybacks while Bitcoin trades below the company's average cost basis. The model works when BTC rises; the test is whether it survives a prolonged bear market.
This article is for informational purposes only and does not constitute investment advice.
