Strategy’s stock fell 1.4% in after-hours trading despite the company announcing a $10 billion profit in the second quarter.
Its total market capitalisation now stands at just under $113 billion, and shares of the company are up 34% this year.
The 11-figure profit comes on the heels of a near $6 billion loss in the first quarter of 2025, mounting pressure from circling short-sellers, and growing competition from other firms jumping on the latest crypto craze: corporate treasuries.
These are firms that accumulate Bitcoin — and more recently altcoins — to beef up their balance sheets, sometimes with no other business model in mind.
Those firms pose a significant threat to Strategy, which has seemingly foregone its commercial interests as a business software enterprise in favour of its endeavours as a Bitcoin treasury.
One example is Metaplanet, a former hotel budget operator-turned-Bitcoin treasury company that hails from Japan. The firm sold off the majority of its property and used the proceeds to buy Bitcoin in bulk. Now, Metaplanet sits in seventh place globally for most Bitcoin held by a corporation.
The trend, initiated by Strategy’s executive chairman Michael Saylor back in August 2020, has now spilled into other cryptocurrencies. Ethereum treasury companies are cropping up, as are firms adding XRP to their balance sheets. Even Binance’s BNB is now held as a so-called strategic asset.
Strategy now holds more than 3% of Bitcoin’s total supply. That amounts to 628,791 Bitcoin, worth about $74 billion.
That staggering figure isn’t enough for Saylor, however. The firm plans on raising another $4.2 billion to buy more Bitcoin by way of their newly unveiled STRC offering.
Saylor’s strategy has spurred an entire industry of copycats looking to mirror the scheme — and the effect it’s had on the stock price.
Funding models
So how does Strategy fund its relentless Bitcoin buys?
First, convertible debt. The idea is simple: borrow now, buy Bitcoin, and let the rising value of both Bitcoin and the company’s shares do the rest. If the stock keeps climbing, the debt converts to equity — and the company never has to pay it back in cash.
Second, preferred shares. These are designed to attract yield-hungry investors without diluting existing shareholders too much.
Preferreds typically pay a fixed dividend and sit above common shares in the capital stack, giving investors a cushion if things go sideways.
Critics, such as legendary short-seller Jim Chanos, have called them “complete financial gibberish.”
Lastly, Strategy deploys at-the-market equity facilities, also known as ATMs. These allow Saylor to drip-feed small amounts of stock directly into the market, mostly when the price looks strong. Still, the model isn’t without risk.
