Bitcoin Giant Strategy Records Q3 Profits of $2.8 Billion

Leading Bitcoin treasury Strategy (MSTR) generated $2.8 billion in profits for its third quarter, the company announced Thursday after market close, as it continued its aggressive approach to BTC accumulation, despite more challenging conditions for crypto markets.

Strategy reported net income of $8.42 per common share on a diluted basis.

MSTR shares were trading at about $262 after hours, a more than 3% gain from its Thursday closing price. The company's stock plunged more than 7% during trading hours.

MSTR shares, which closed at $254.57, remain far off Wall Street Journal consensus estimates, which set a target price of $551.53. Shares have risen more than 1,400% since the company pivoted its focus from software to BTC accumulation in 2020, but the price has been steadily declining over the last three months.

Bitcoin's price rose more than 6% in Q3, a tepid increase in the underlying asset after its 30% spike in the previous quarter. Revenues from the firm's software business totaled $128 million.

Tysons Corner, Virginia-based Strategy continued to accumulate BTC, although it ratcheted back the pace of its buys as the quarter progressed and BTC's price proceeded haltingly.

At the end of the quarter, Strategy had accumulated more than 640,000 Bitcoin now worth roughly $68 billion based on BTC's current price. It remains the world's largest crypto treasury company and the pioneer of a strategy adopted by more than 200 other publicly traded firms.

The largest cryptocurrency by market value, which finished Q3 above $114,000, plunged below $107,000 on Thursday, continuing an October swoon fueled by liquidity concerns and macroeconomic uncertainties.

Saylor has remained sanguine about Bitcoin's prospects, saying in a CNBC interview Wednesday that he expected the price to "grind up" to $150,000 by year's end.

Strategy spent $43 million on 390 Bitcoin last week, the company said in a press release on Monday, its largest purchase of the asset in nearly a month.

Although Strategy has historically issued common shares at a premium relative to its Bitcoin holdings to grow its stockpile, the company has taken a different approach to raising capital in recent weeks, while leaving its primary source of funding untapped.

The world’s largest corporate holder of Bitcoin hasn’t issued common shares since around Sept. 29, when it unveiled a $22 million Bitcoin purchase. At the time, Strategy said that it had raised $128 million, leaving it with extra cash on hand as dividend payments approached.

As Strategy stopped issuing common shares, its Bitcoin purchases had gotten relatively smaller, totaling 196 BTC, 219 BTC, and 390 BTC. They were among some of the smallest Bitcoin purchases that Strategy has disclosed this year.

Last quarter, Strategy disclosed $114.5 million in second-quarter revenue, a 3% increase compared to a year ago, according to a company blog post.