Strategy (NASDAQ: MSTR) has watched its key internal performance gauge slip deep into negative territory, with BTC Yield, the company’s own measure of bitcoin accumulation per share, falling to -3.7% for the year through October 25.
That figure had stood at a positive 4.5% as recently as late July, meaning the reversal has been sharp and now sits far below management’s stated annual target of roughly 10% growth.
The deterioration reflects a funding machine that has effectively stalled: Strategy raised just $58.7 million through stock sales in the first three weeks of October, compared with $5.41 billion raised during the entire third quarter.
Much of that third-quarter capital went not toward buying bitcoin but toward repurchasing STRC, the company’s 12% preferred stock, with $2.04 billion deployed on those buybacks so far this year.
CEO Phong Le addressed the preferred stock situation directly in the earnings release, stating: “Strategy demonstrated its commitment to returning STRC to health.”
Compounding the internal pressures, CFO Andrew Kang will step down on November 5, removing a key financial architect at a moment when the company’s capital strategy is under scrutiny.
The quarterly report itself delivered a mixed picture: record third-quarter operating income of $20.91 billion, driven almost entirely by gains on the company’s bitcoin holdings, while revenue of $125.4 million came in below the $129.0 million Wall Street consensus.
All of this landed alongside a broader crypto market shock, as a record $6.3 billion hack at Binance, disclosed late Thursday, sent bitcoin tumbling below $80,000 and triggered a broad selloff in crypto-related equities before Friday’s open.
That single session accounted for nearly eight percentage points of the roughly 11% weekly decline in MSTR shares, with Coinbase Global (NASDAQ: COIN) suffering even more, losing approximately 13% across the week as the hack coincided with its own weak quarterly results showing transaction revenue down 44% year-over-year to $590.2 million.
Looking ahead, the next significant test arrives November 11, when MSCI publishes a list of companies potentially subject to removal under a new index rule, with any confirmed exclusion requiring index funds to sell their MSTR positions at the November 30 close.
The valuation context adds another layer of complexity: the stock traded at just 1.1 times book value recently, a stark contrast to its five-year average of 3.9 times and the peak of 25 times reached in November 2024, even as Wall Street’s average price target of $239 implies roughly 83% upside from current levels.
