- Strategy expects a $6 billion unrealized loss for Q1 2025, despite receiving a $1.69 billion tax benefit.
- The company holds over 528,000 Bitcoin, acquired for more than $35 billion at an average price of $67,458.
- Strategy plans to raise $2.1 billion through preferred stock to manage debts and potentially increase its Bitcoin holdings.
Software firm Strategy, led by executive chairman Michael Saylor, may be forced to sell part of its significant Bitcoin holdings to cover financial obligations if it cannot secure additional funding. The company revealed the risk in a regulatory filing dated April 7.
As of March 31, Strategy holds 528,185 Bitcoin, purchased for over $35 billion at an average price of $67,458 per coin. With Bitcoin currently trading around $76,000, the company’s holdings remain profitable, but continued price drops could reduce that margin. The company’s dependency on Bitcoin performance increases its financial exposure.
Expected $6 Billion Loss Highlights Operating Challenges
The first quarter of 2025 might produce an unrealized loss of about $6 billion, but the company will receive a $1.69 billion tax benefit. The firm maintains $8 billion in outstanding debt that requires $35 million annual interest payments as well as $150 million yearly dividends. The main software operations of the company lack sufficient sales revenue to cover its existing financial obligations.
To address the financial strain, Strategy announced on March 10 that it intends to raise $2.1 billion through the sale of perpetual preferred stock. The offering includes an 8 percent dividend, aiming to secure capital without relying on additional debt. Proceeds will support operations and allow the company to purchase more Bitcoin.
Market History Suggests Familiar Disclosure Pattern
While the warning about potential Bitcoin sales has raised investor concerns, similar statements have appeared in previous regulatory filings, suggesting that such risk disclosures are not uncommon for the company. Nonetheless, the current financial pressure adds urgency.
The Bitcoin future looks promising according to certain analysts who dismiss the current market difficulties. In a recent statement, Arthur Hayes from BitMEX predicted Bitcoin could reach values above $110,000 because he expects global liquidity growth through central bank interest rate reductions
