Saylor's Strategy Flirts Again with the Danger Threshold at Which His Company Is Worth Less Than His Bitcoin

Michael Saylor’s company, Strategy Inc., is expected to post a substantial fourth-quarter loss due to the 24% drop in Bitcoin’s price during the period. This would mark a sharp reversal from the $2.8 billion profit recorded in the prior quarter, highlighting the volatility of Strategy’s investment model.

The loss is largely tied to the company’s accounting shift to mark-to-market valuation for its $60 billion Bitcoin holdings. As Bitcoin declined, Strategy’s reported earnings were hit by the unrealized loss, a practice now standard under fair-value accounting.

Investor confidence has been eroding since Strategy shifted to a Bitcoin-focused strategy in 2020. The stock has fallen nearly 70% from its November 2024 high, raising concerns that the company may need to sell Bitcoin to meet dividend and debt obligations.

Why Is Strategy’s Valuation at Risk?

Strategy’s enterprise value is now approaching the level of its Bitcoin holdings for the first time in over two years. The company’s enterprise value — including debt and preferred shares — is around $61 billion, while its Bitcoin portfolio is valued at about $59 billion.

This trend underscores the fragility of the corporate-treasury model Saylor championed. Investors are beginning to question whether a company with no traditional revenue streams and high leverage can sustain a stock price premium over the value of its underlying assets.

What Has Strategy Done to Address Concerns?

To ease fears of a liquidity crisis, Strategy established a $1.44 billion cash reserve on December 1, funded by the sale of common shares. This reserve is expected to cover at least 12 months of preferred dividend and debt interest payments.

The company also updated its full-year earnings guidance, assuming Bitcoin will trade between $85,000 and $110,000 by year-end. Based on that range, Strategy expects operating income to range from a $7 billion loss to a $9.5 billion profit.

How Are Analysts Reacting to the Outlook?

Analysts say the current environment is testing the viability of the corporate-treasury model. Bruce Pounder of GAAP Lab notes that the new accounting standards have made it harder for companies to hide losses, creating more transparency — and volatility — for investors.

The company’s stock has also faced pressure due to heavy share issuance, which has diluted existing shareholders. Strategy raised $2.67 billion in December through equity sales to fund new Bitcoin purchases.

What Is the Current State of Strategy’s Bitcoin Holdings?

As of December 28, 2025, Strategy holds 672,497 Bitcoin, purchased at an average price of $74,997. At current prices near $87,343, the portfolio is valued at approximately $59 billion, with an unrealized gain of about $8.6 billion.

The company has continued its accumulation strategy, buying 1,229 Bitcoin in late December for $108.8 million. This purchase was funded through the sale of 663,450 Class A shares.

What Do Investors Need to Watch Now?

Market observers are tracking Bitcoin’s price action and Strategy’s ability to maintain its cash reserves without selling assets. Analysts also note that if the stock continues to trade below the net asset value of its Bitcoin holdings, the model may lose its appeal to investors.

With Bitcoin at $87,648 as of year-end 2025 and shares of Strategy down 48% in 2025, the company faces a critical juncture. A sustained recovery in Bitcoin’s price or a shift in the company’s funding strategy could restore investor confidence. But for now, the risks remain high.

Strategy’s performance remains closely tied to the broader crypto market and its ability to manage the trade-offs between capital appreciation, dilution, and liquidity.