Strategy Inc. (MSTR) shares rose 4.73% to $97.74 on Thursday, even as the company reported a substantial second-quarter net loss of $8.22 billion. The stock later slipped 0.45% to $97.30 in after-hours trading following the earnings release. Expanded bitcoin holdings and reinforced capital reserves appeared to underpin the market's response. Strategy operates as the largest publicly listed corporate holder of bitcoin, meaning its quarterly results are heavily shaped by digital asset accounting rules. Under fair value accounting standards adopted for digital assets, companies must mark bitcoin holdings to market each reporting period, translating price declines directly into reported losses regardless of whether any assets are sold.

Bitcoin Holdings Expand During Market Decline

Strategy held 843,775 bitcoin as of July 26, representing 25% growth since the beginning of 2026. The holdings carried a cost basis of $63.69 billion and a market value of $54.77 billion, leaving the company with a significant unrealized loss after bitcoin traded below its average purchase price.

The $8.22 billion net loss contrasted sharply with a $10.02 billion profit recorded in the same quarter one year earlier. Operating losses reached $8.33 billion, driven by declining digital asset values during the quarter. Preferred dividends further reduced common shareholder results by $400.7 million during the reporting period.

Despite the quarterly losses, Strategy reported a 4.5% bitcoin yield and a year-to-date bitcoin gain of 29,997 BTC through 2026. The company valued that gain at $1.95 billion based on bitcoin's July 27 market price. Strategy also sold $218.4 million of bitcoin to help fund preferred dividend payments. The divergence between the large GAAP net loss and the stock's positive reception reflected the distinction between mark-to-market accounting charges and the company's operational execution in accumulating bitcoin.

Capital Raising Strengthens Balance Sheet

Strategy raised $17.06 billion through its at-the-market (ATM) equity programs during 2026 through July 26. Of that total, $8.41 billion was collected during the second quarter, with an additional $1.28 billion raised afterward. The capital programs expanded the company's funding options despite weaker bitcoin prices and heavy accounting losses. The ATM mechanism allows Strategy to issue new shares at prevailing market prices and deploy the proceeds into bitcoin, a model that ties the company's equity base directly to its digital asset treasury strategy.

In May, Strategy repurchased $1.50 billion of convertible notes for approximately $1.38 billion in cash, completing the transaction at an estimated 8% discount to face value. The move reduced outstanding convertible debt from $8.21 billion to $6.71 billion.

The company also established a $1 billion MSTR share repurchase program, though no purchases have been made to date. Management indicated the program may be utilized when shares trade below the company's assessment of intrinsic value. Strategy additionally introduced new performance measures covering credit costs and net bitcoin per share, a metric designed to track whether each share's backing in bitcoin is growing over time.

Digital Credit Program Supports Dividend Coverage

Strategy increased its dollar reserve to $3.75 billion by July 26, providing coverage for more than 2.1 years of preferred dividends and interest payments. This reserve buffer supports the company's credit structure at a time when bitcoin remains below Strategy's average acquisition cost.

The company raised $7.53 billion through STRC (perpetual strike preferred stock) issuances during 2026, representing 254% growth. Strategy increased STRC's dividend rate to 12% to support trading near $100 per share and plans regular repurchases while STRC remains below its stated value.

Between July 20 and July 26, Strategy repurchased 288,930 STRC shares for $25 million, representing $28.9 million in stated value at an average price of $86.53. Approximately $975 million remains available under the company's digital credit securities program. The multi-layered capital structure spanning common equity, convertible debt, and perpetual preferred stock reflects Strategy's effort to sustain bitcoin purchases across market cycles while managing obligations to different classes of investors.