MicroStrategy, the well-known business intelligence firm, has officially changed its name to “Strategy” to reflect its growing focus on Bitcoin.
The company also introduced a new logo featuring the Bitcoin symbol and an orange colour scheme, representing its dedication to the cryptocurrency.
This move follows a series of major Bitcoin investments and signals a complete shift from software to a Bitcoin treasury company.
Despite its deepening commitment to Bitcoin, the company recently reported financial losses. However, it expects a boost from new accounting standards that will allow it to report unrealised Bitcoin gains.
Investors and analysts have mixed reactions to the rebrand, with some seeing it as a strategic move and others as an attempt to regain stock market confidence.
Financial struggles amid massive BTC purchases
In the last quarter of 2024, Strategy faced a net loss of $670.8 million. This is a significant decline compared to the previous year, when the company reported a profit of $89.1 million.
The main reason for this downturn was a sharp rise in business expenses, which grew by 693% to $1.1 billion. A large portion of these expenses came from impairment losses linked to its Bitcoin holdings.
Revenue also dropped by 3% year-over-year, falling to $120.7 million. However, despite this decline, Strategy’s Bitcoin yield for 2024 was an impressive 74.3%. This key metric reflects the percentage growth in the company’s Bitcoin holdings relative to its total shares.
The company’s biggest-ever Bitcoin purchase happened in the fourth quarter of 2024, when it acquired 218,887 $BTC for about $20.5 billion. This brought its total holdings to 471,107 $BTC, currently worth around $46 billion.
Michael Saylor, the company’s co-founder and executive chairman, remains confident in the firm’s Bitcoin strategy. “We believe Bitcoin is the future of financial stability, and our commitment to it remains stronger than ever”, he stated.
Plans to boost Strategy’s balance sheet
Starting from January 2025, Strategy will adopt new fair-value accounting standards set by the Financial Accounting Standards Board (FASB). These rules will allow companies to record digital assets like Bitcoin at their actual market value.
Previously, firms had to report losses when Bitcoin prices fell but could not record gains unless they sold their holdings.
With this change, Strategy will be able to recognise unrealised Bitcoin profits, which is expected to add a massive $12.75 billion to the company’s balance sheet.
This adjustment could make the company’s financial position appear much stronger in the coming quarters.
Bernstein analysts, who closely track the company, wrote in a note to investors: “From Q1 2025, Strategy’s Bitcoin holdings will be reflected at market value, allowing it to report price increases as net income”.
However, some uncertainties remain. The tax treatment of Bitcoin under these new accounting rules, combined with provisions from the 2022 Inflation Reduction Act, may require Strategy to seek special exemptions from the Internal Revenue Service (IRS).
Analysts caution that this could lead to potential regulatory hurdles in the future. Despite these concerns, Saylor is optimistic. “This is a game-changer for Bitcoin treasury strategies, and we’re in a strong position to benefit from these new accounting rules”, he said during an earnings call.
Strategy’s future plans
Strategy’s rebranding comes at a time when its stock has faced volatility. Over the past month, the stock price has dropped by 11%, though it remains up 580% over the past year.
Some market analysts believe the name change is a way to attract fresh investor interest and boost its public image.
One analyst from Bernstein noted: “The rebrand aligns with Strategy’s vision, but it also serves as a way to strengthen investor confidence amid stock fluctuations.”
Looking ahead, Strategy has set ambitious goals for 2025. The company aims for an annual Bitcoin gain of $10 billion and is planning to raise $42 billion through a combination of equity and debt between 2025 and 2027.
So far, it has already raised $20 billion through stock sales, convertible bonds, and preferred stock offerings.
As part of its long-term plan, Strategy is targeting a leverage ratio of 20% to 30%, though it currently stands at around 15%. Its $6.2 billion in convertible debt does not mature until 2028, providing financial flexibility to continue its Bitcoin accumulation strategy.
Strategy’s CEO, Phong Le, said: “We are focused on growing our Bitcoin holdings while managing risk. Fixed-income financing will play a larger role in funding future acquisitions”.
Despite recent losses, the company remains committed to Bitcoin. As of now, it holds more than 2.2% of Bitcoin’s total 21 million supply.
The rebranding marks a turning point in Strategy’s journey. Whether this move will improve its market position remains to be seen, but one thing is clear—the company is more dedicated to Bitcoin than ever before.
