Strategy Reports $8.6B Loss, Pledges to Restore STRC to Par

Strategy, led by CEO Michael Saylor and President Phong Le, reported a $8.6 billion net loss in its second-quarter earnings call, driven entirely by a non-cash mark-to-market hit on its massive Bitcoin trove. The company's Bitcoin holdings jumped 11% to 846,000 BTC during the quarter, with Strategy adding a net 83,901 coins at an average price of roughly $75,500.

The loss was largely due to the decline in Bitcoin prices to around $58,700 by the end of June. However, Strategy's CEO Michael Saylor emphasized that the company executed aggressively during the quarter, with its year-to-date capital raised swelled to $17 billion and its flagship digital credit product, STRC, doubled in notional size to $10.5 billion.

The company also acknowledged a misstep in letting its US dollar reserve fall too low and has since rebuilt it to a record $3.75 billion, covering over two years of dividend and interest payments. Saylor and Le pledged to restore STRC to par ($99-$100) within roughly 70 trading days, using a $1 billion buyback authorization and a $58.5 billion total reserve pool as backstop.

Strategy's ability to tap capital markets remained undimmed, with the company raising $8.4 billion in Q2 alone, including $5.5 billion of digital credit. The company added two new covering analysts (Barclays and Siebert), bringing the total to 16, with an average MSTR price target of $296.