Strategy (MSTR), the world’s largest publicly traded bitcoin holder is experiencing a rapid increase in losses on its large holdings.
The company currently owns 713,502 BTC at an average acquisition price of $76,052. With spot bitcoin trading near $67,000, this represents an unrealized loss of nearly $6.5 billion, or about 12% relative to the average cost basis.
Read more: Michael Saylor’s bitcoin stack is officially underwater, but here’s why he’s probably not reaching for the panic button
MSTR shares are down about 13% on the day, making Thursday’s biggest single-day drop in nearly a year. The stock is now down 66% year-to-date and nearly 80% from an all-time high reached shortly after Donald Trump’s November 2024 election victory.
Despite the massive decline, the strategy continues to trade at a modest premium to the value of bitcoin on the balance sheet, known in the trade as an mNAV (multiple of net asset value) greater than one – it is currently around 1.09. This suggests that Michael Saylor and team have the capacity to continue issuing common stock with which to purchase additional bitcoin without the move being dilutive to shareholders.
The company will report its earnings for the fourth quarter after midnight Thursday. No surprises are expected in the results, but investors will certainly be interested to see what Saylor has to say given the current market panic.
Meanwhile, STRC, Strategy’s perennial favorite equity instrument marketed as a high-yield, high-credit, money-market-style product, is trading around $95, below its $100 face value. If STRC does not return to par by the end of the month, the dividend rate is expected to increase by another 25 basis points to 11.5%.
The only other comparable perpetual preferred stock currently trading is Strive’s (ASST) SATA, which is down about 4% at $86 and will likely require a dividend increase to return to par. Strive’s common equity, ASST, is down approximately 11% on the day and is trading near $0.52 per share.
