Strategy's Q3 profit drops to $2.8 billion as bitcoin rally fades, mNAV premium hits 18-month low

Bitcoin-treasury firm Strategy (ticker MSTR) reported $2.8 billion in third-quarter profit, down sharply from its record $10 billion in the prior quarter, as bitcoin’s late-summer rally lost momentum and the company’s valuation premium continued to compress.

The results still topped analyst estimates, with diluted earnings of $8.42 per share versus expectations of $8.15, but marked the company’s weakest quarter since adopting fair-value accounting in January.

Strategy’s stock closed at a more than six-month low of around $254 on Wednesday but rose roughly 4% in post-market trading after earnings were released. Bitcoin, meanwhile, was trading near $107,000, down around 15% from early October's all-time high. 

The decline in bitcoin's price has pushed Strategy’s mNAV multiple, which compares the company’s enterprise value to its bitcoin holdings, down to about 1.2×, the lowest since March 2023. That’s a steep drop from its 3.9× peak last November, when Donald Trump’s election victory and a sudden bitcoin surge to nearly $100,000 from below $70,000 sent Strategy’s valuation soaring.

Strategy, by far the largest bitcoin treasury company, added roughly 43,000 bitcoins during the quarter, bringing total holdings to 640,808 BTC worth just under $69 billion at current prices, according to the SaylorTracker dashboard.

That’s its slowest quarter of accumulation this year, down from 69,000 BTC in Q2 and over 80,000 BTC in Q1, as weekly purchases have steadily tapered alongside a weaker mNAV premium.

Preferred stocks

Strategy continues to lean on its suite of high-yield preferred stocks — instruments it created to raise capital for bitcoin purchases without issuing common shares. These securities, branded under tickers like STRC, STRF, STRK, and STRD, pay fixed or variable dividends and trade separately from the common stock.

The company said it will raise the dividend on its variable-rate STRC to 10.5% for November, up from 10.25% last month.

The higher rate helps attract investors when prices dip, with dividends funded largely through ongoing preferred and equity issuance rather than cash flow, which allows Strategy to keep accumulating bitcoin even as its stock and mNAV tightens