Michael Saylor’s bitcoin-buying company Strategy (MSTR) recorded a $14.5 billion unrealized loss in the first quarter as the decline in bitcoin’s price erased value from the firm’s holdings, the company said in a securities filing on Monday
Still, shares rose by roughly 6% through early trading on Monday while bitcoin (BTC-USD) gained 4% to trade above $69,500 per coin.
In the company’s latest buying spree, also disclosed on Monday, Strategy bought roughly $330 million worth of bitcoin between April 1 and April 5, further cementing its position as the largest corporate holder of the cryptocurrency.
Since the beginning of the year, bitcoin has lost roughly 20% of its value, denting the roughly $58 billion in the coin that Strategy owns. The pullback from the cryptocurrency’s all-time high last year brought the value of Strategy’s holdings below their average purchase price above $75,000 by the end of the quarter, according to Bloomberg.
Saylor’s company funded its latest wave of purchases by selling both common stock and “Stretch” preferred shares, according the Monday regulatory disclosure. Sales of common stock dilute investors, whereas sales of the preferred shares avoid dilution but introduce a fixed obligation, Bloomberg reported.
The company sold roughly $300 million of common and preferred shares between March 30 and March 31, and sold another $175 million between April 1 and April 5, according to regulatory filings.
Strategy is expected to report first-quarter earnings on April 30. In the company’s fourth-quarter results, reported in February, Strategy reported and operating loss of $17.4 billion and a net loss of $12.6 billion on the quarter, for an operating loss of $5.4 billion and a net loss of $4.2 billion on the year.
“Some of you bought Bitcoin or MSTR in the last year. This is your first downturn,” Strategy CEO Phong Le said on the company’s fourth-quarter earnings call.
“My advice is to hold on. Remember the fundamentals that cause you to buy Bitcoin … For those of you who have been with us on this journey since 2020, you’ve seen other periods of Bitcoin and MSTR downturns, and you held on and you were rewarded for your conviction.”
On that call, Saylor said his company should benefit from a more bullish outlook toward cryptocurrency on Capitol Hill. The Clarity Act, which would create a federal regulatory framework for digital assets, has passed the House of Representatives but remains stalled in the Senate.
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
