Strategy's Q2 Earnings to Test Bitcoin Pivot
Strategy, the world's largest corporate Bitcoin holder, is set to report its second-quarter results on Thursday, with investors eager to see if the company's pivot towards Bitcoin sales and capital structure reforms can stabilize its business model.
The company held 843,775 bitcoins as of late July, but faces mounting questions about its ability to fund operations and preferred stock dividends as Bitcoin trades well below the company's average acquisition cost.
Analysts expect earnings of 79 cents per share on revenue of $122.9 million, marking a dramatic sequential improvement from the prior quarter's loss of $38.25 per share, though revenue would edge slightly lower from the $124.3 million reported in May.
The company's preferred securities have traded below their $100 par value, and management has established a $2.55 billion USD reserve to address this issue, but investors will scrutinize whether these moves are sufficient to restore the security to par, a prerequisite for renewed capital raising.