GuShiio.com MicroStrategy recently held a fourth quarter 2024 earnings conference call and announced its rebranding plan. The company officially changed its name to “Strategy”. The Q4 financial report showed that Strategy’s Bitcoin holdings almost doubled in just three months. Company founder and CEO Michael Saylor also revealed a new strategy to attract “a large number of investors.”
Author: Weilin, PANews
In the early morning of February 6, Beijing time, MicroStrategy held a financial conference call for the fourth quarter of 2024 and announced its rebranding plan. The company officially changed its name to “Strategy” and called itself “the world’s first and largest Bitcoin fund management company”.
The Q4 financial report showed that the company’s net loss was US$670.8 million, and operating expenses (including impairment losses on Bitcoin holdings) for the quarter reached US$1.103 billion, a year-on-year increase of 693%.
Strategy’s Bitcoin holdings almost doubled in just three months. At the same time, Strategy has formulated KPI indicators, namely, annual “Bitcoin Gain” and “Bitcoin Dollar Gain”, and set a 2025 annual “Bitcoin Dollar Gain” target of US$10 billion. At the meeting, company founder and CEO Michael Saylor also revealed new strategies to attract “a large number of investors.”
Q4 earnings report: Bitcoin holdings almost doubled in three months
In the fourth quarter of 2024, Strategy’s net loss was $670.8 million, or a loss per share of $3.03. By comparison, the company achieved a profit of $89.1 million, or 50 cents per share, in the same period last year. The loss was mainly caused by the US$1.01 billion impairment charge on Bitcoin holdings, a significant increase from the US$39.2 million impairment in the same period last year.
Operating expenses (including impairment losses on Bitcoin holdings) for the quarter reached US$1.103 billion, a year-on-year increase of 693%. As of December 31, 2024, the company’s cash and cash equivalents were US$38.1 million, down from US$46.8 million in the same period last year.
While most investors will focus on Strategy’s Bitcoin assets, Strategy also reported gains from its traditional software business. Total software revenue in the fourth quarter was approximately $121 million, down 3% year-on-year. Total revenue for the full year of 2024 will be approximately US$464 million, a year-on-year decrease of 7%.
According to the financial report, the most eye-catching thing is that its already huge Bitcoin holdings have almost doubled in just three months. As of January 24, Strategy currently holds 471,107 bitcoins with a market value of approximately US$44 billion and a total cost of US$30.4 billion. The fourth quarter was the largest quarterly increase in the company’s bitcoin holdings, with a total of 218,887 bitcoins purchased at a cost of US$20.5 billion. Throughout 2024, the company purchased 258,320 bitcoins, with a total purchase cost of US$22.1 billion and an average price of US$85,447.
Strategy has added bitcoin to its balance sheet every quarter since August 2020, making more than 50 announcements. This time, the company reported that the Bitcoin yield in 2024 was 74.3%, a metric used to evaluate the strategic performance of investing in Bitcoin.
According to the meeting document,”Bitcoin Yield (BTC Yield) is a key performance indicator (KPI) that represents the percentage change over the cycle in the ratio between the amount of Bitcoin a company holds and its assumed diluted number of shares outstanding.” Strategy has increased its annual BTC yield target for the next three years from a 6%-8% range to 15%. The company’s BTC yield in the fourth quarter was 2.9%, while its BTC yield in the third quarter was 5.1%.
Strategy also announced another new key performance indicator (KPI), namely annual “Bitcoin Gain” and “Bitcoin Dollar Gain”, and set a 2025 annual “Bitcoin Dollar Gain” target of US$10 billion.
Bitcoin Gain (BTC Gain) represents the amount of bitcoins a company holds at the beginning of a period multiplied by the bitcoin yield (BTC Yield) for that period. Bitcoin dollar gain (BTC $ Gain) is the dollar value of Bitcoin gains, calculated by multiplying the Bitcoin gain by the Bitcoin market price on the Coinbase exchange at 4 p.m. Eastern Time on the last day of the application period.
Bitcoin’s “smart leverage”
In order to better reflect its Bitcoin strategy, MicroStrategy announced that it now conducts business under the Strategy brand. The announcement stated that Strategy is the world’s first and largest Bitcoin reserve company, the largest independently listed business intelligence company, and a constituent of the Nasdaq 100 Index. The new Logo contains a stylized “B” letter, symbolizing the company’s Bitcoin strategy and its unique status as a Bitcoin money management company. The brand’s main color has now changed to orange, representing energy, wisdom and Bitcoin.
In its third-quarter earnings report released in October last year, Strategy announced its “21/21 Plan”, which aims to raise US$42 billion over the next three years, of which US$21 billion will come from equity financing and another US$21 billion will come from issuance of fixed income securities.
Strategy’s capital raising and bitcoin purchases accelerated significantly in the fourth quarter of 2024, with the company raising $15 billion through equity offerings and $3 billion through convertible bonds in less than two months.
“We have completed $20 billion of the $42 billion capital plan, far exceeding our original timetable, while leading the digital transformation of financial market capital,” CEO Phong Le said in the announcement. “Looking forward to the rest of 2025, we are well positioned to further enhance shareholder value by leveraging the strong support of institutional and retail investors for our strategic plan.”
In addition, at the earnings conference, company founder Michael Saylor pointed out a 45% volatility gap between Bitcoin and traditional markets and revealed new strategies to attract “a large number of investors.”
“We design our business to maintain volatility,” Saylor said, comparing Strategy’s approach with traditional corporate capital operations that typically minimize volatility.
Between traditional assets such as the SPDR SP500 ETF and Invesco QQQ Trust, which have volatility levels between 15 and 20, and Bitcoin, which have volatility levels between 50 and 60, this creates a gap area of approximately 45%. Strategy’s common stock target volatility is even higher than Bitcoin itself, aiming to reach a volatility level of 80-90 while maintaining what Saylor calls “smart leverage” through a combination of equity issues and convertible bonds.
“There are a lot of investors who want this kind of volatility. They may not want to have the extreme leverage of MicroStrategy, or even the raw and unpolished volatility of IBIT or BTC, but Strike (Strategy’s permanent preferred stock STRK) attracts a new group with different return characteristics and volatility characteristics.”
Saylor refers to Strike Preferred Stock, which offers a dividend yield of 8% and has Bitcoin exposure. On January 27, according to official news, MicroStrategy announced that based on market and other conditions, it intends to issue 2,500,000 shares of MicroStrategy A Series perpetual preferred shares. MicroStrategy intends to use the net proceeds from the offering for general corporate purposes, including purchasing Bitcoin and working capital.
The shares were then sold at $80 per share, 20% below the market price, effectively pushing the buyer’s yield to 10%
For now, with Strategy’s rebranding and significant growth in its Bitcoin holdings, the company has demonstrated its ambitions as one of the world’s largest Bitcoin reserve companies. In the future, whether Strategy can flexibly carry out strategic layout while continuing to realize the benefits of investing in Bitcoin will be the key to its success.
