Essential Insights
- Strategy, the top corporate Bitcoin holder, reported a massive $12.54 billion net loss in Q1 2026, mainly due to unfavorable BTC prices, but its business fundamentals remain steady with growing revenues.
- Despite losses, Strategy purchased an additional 89,599 BTC, boosting its total holdings to 818,334 BTC—a 22% increase this year.
- The company has raised nearly $12 billion through capital markets in 2026, including a record $8.5 billion in preferred stock, making STRC the world’s largest preferred stock by market cap.
- CEO Michael Saylor indicated Strategy might sell some Bitcoin to pay dividends, a notable shift from his long-standing stance against selling BTC, amid concerns over US interest rates and market impact.
Strategy Posts $12.5 Billion Loss in Q1 as Bitcoin Prices Drop
Huge Losses Driven by Falling Bitcoin Prices
Strategy reported a $12.54 billion loss in the first quarter of 2026. This loss marks a significant increase compared to previous years. The main reason is a $14.46 billion unrealized loss from poor Bitcoin prices earlier this year. During this period, Bitcoin’s value dropped sharply, affecting Strategy’s financial results. Despite the loss, the company’s main software business remained steady. Revenues increased by almost 12%, reaching $124.3 million, with gross profit of $83.4 million. Importantly, Strategy bought more Bitcoin in the quarter. It added 89,599 BTC, boosting its total holdings to over 818,000 BTC. This represents a 22% increase so far this year. The company also raised nearly $12 billion through capital markets in 2026, including over $7 billion in Q1 alone. Its preferred stock, STRC, became the largest of its kind globally, with a notional value of $8.5 billion. CFO Andrew Kang noted that the company has paid out over $693 million in dividends via various instruments.
Selling Bitcoin to Cover Dividends Sparks Debate
During the earnings call, Strategy’s Chairman Michael Saylor suggested the company might sell some Bitcoin. He said, “We will probably sell some Bitcoin to pay a dividend just to inoculate the market and send the message that we did it.” This statement surprised many because Saylor has long promoted Bitcoin as an asset you don’t sell. Some analysts see this as a sign of possible changes in Strategy’s long-term plans. Others point out the risks involved, especially with interest rates and the company’s floating preferred stock STRC. Critics like Peter Schiff argue that Strategy relies heavily on issuing new shares to fund dividends, raising questions about its financial stability. Meanwhile, the company defends its strategy, pointing to its long Bitcoin holdings as a safeguard. After the earnings release, Strategy’s stock closed at around $187, while STRC traded just below $100, offering a yield of 11.5%. Bitcoin itself was valued at about $81,000 at the time.
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