Strategy Inc.'s Stock Soars with 42% Annualized Return Since Bitcoin Adoption

Strategy Inc.'s stock has delivered a 42% annualized return since it adopted Bitcoin as its primary treasury reserve asset in August 2020. This figure surpasses not only Bitcoin itself but also the so-called Magnificent Seven group of large-cap technology stocks and the S&P 500 index over the same period. The company's executive chairman, Michael Saylor, periodically revisits this comparison using a five-year stock chart to argue that converting a mid-cap software firm into a leveraged Bitcoin holding vehicle has outperformed nearly every other asset class available to public market investors.

The company has been accumulating Bitcoin despite its treasury sitting 17.9% underwater, with an estimated $11.4 billion paper loss as of July 29. This discrepancy arises from the fact that early Strategy purchases made when Bitcoin traded for a fraction of current prices still anchor the stock's long-run return figures.

Strategy has introduced new metrics to help investors understand its position, including Net BTC Per Share, BTC Hurdle ARR, and BTC Floor ARR. These metrics aim to show the company's Bitcoin holdings' actual worth once debt and preferred-stock obligations are subtracted out.