Strategy books $19.5 billion quarterly profit as its finance chief steps down

Strategy, the company that has turned itself into the largest corporate holder of bitcoin, reported one of the biggest quarterly profits in its history. It also announced a change at the top of its finance team.

What happened

Strategy reported $19.53 billion in third-quarter net income, driven by a $20.91 billion gain on its bitcoin. It posted record quarterly operating income of about $21 billion and now holds 848,517 BTC. Preferred shareholders approved a move to daily dividends.

Chief financial officer Andrew Kang has resigned. Executive chairman Michael Saylor said the company could create up to $30 billion in what it calls digital credit without issuing new common stock and without any further rise in the bitcoin price. The company plans more bitcoin purchases.

The shares fell after the results. Analysts at StoneX and TD Cowen kept their buy ratings, pointing to a $4.83 billion cash reserve and a more stable structure for its STRC preferred shares.

Background

Strategy, formerly MicroStrategy, values its bitcoin at market prices. Its profits therefore swing with the price of bitcoin, and a strong quarter on paper mostly reflects how much bitcoin rose during that period.

The company funds its purchases by selling stock and several kinds of preferred shares. Preferred shares pay regular dividends, and the switch to daily payments is designed to make them more attractive to income-focused investors.

Why it matters

Strategy has become one of the biggest steady buyers of bitcoin, so its ability to keep raising money matters for the wider market.

The CFO’s departure, the cash reserve and the preferred-share changes will all shape how easily it can keep doing that if bitcoin’s price weakens.