Strategy Posts $8.6 Billion Loss Amid Aggressive Bitcoin Accumulation

Strategy's Q2 earnings call revealed a $8.6 billion net loss driven by a non-cash mark-to-market charge on its Bitcoin holdings, yet the company continued to aggressively accumulate the cryptocurrency, adding a net 83,901 BTC to bring total holdings to 843,775 BTC.

The bigger story was the dislocation in its flagship digital credit product, STRC, which fell to $89.50, well below its $99-$100 par target. Management unveiled a multi-pronged rescue plan that includes building a $3.75 billion USD reserve, using a $1 billion buyback authorization, and selling small amounts of Bitcoin to fund dividends.

CEO Michael Saylor pledged to return STRC to par, aiming for a target date around September 8, and said the company would not issue the security below par under any circumstances. Executives also signaled a more active management of the capital structure, including potential equitization of convertible debt and a refusal to borrow against Bitcoin or launch new credit instruments.