Strategy Shares Plunge as Bitcoin Holdings Weigh on Earnings
Strategy (NASDAQ:MSTR) shares fell 4.5% in afternoon trading after the company reported significant losses due to its cryptocurrency holdings.
The bitcoin development company's core software business performed well, with revenue growing 6.9% year-over-year to $122.4 million.
However, this steady performance was overshadowed by a massive GAAP loss of $24.45 per share, far exceeding the consensus estimate for a profit of $3.07.
The primary cause of the losses was the adoption of new fair-value accounting rules during a crypto pullback, resulting in an $8.32 billion unrealized loss on its digital assets.
Strategy's shares have been volatile, with 58 moves greater than 5% over the last year, and the market seems to consider this news meaningful but not fundamentally changing its perception of the business.