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Tuesday's Bonus Story Strategy Earnings Reveal the Real Risk Behind MSTR StockBy Chris Markoch. Posted: 2/6/2026. 
Key Takeaways- Strategy’s quarterly results are dominated by Bitcoin accounting swings, not the performance of its software business.
- The company’s Bitcoin position is effectively debt-funded leverage, which can amplify gains — and losses — for shareholders.
- With Bitcoin below Strategy’s reported average purchase price, the stock’s risk profile looks closer to a leveraged Bitcoin bet than a traditional software play.
Strategy (NASDAQ: MSTR) stock is down a little over 2% after the company reported its fourth-quarter earnings following the close of markets on Feb. 5. The report highlighted a familiar theme for MSTR investors: quarterly results are increasingly driven by Bitcoin accounting rather than the company's underlying software operations. While Strategy continues to grow its analytics revenue at a steady, modest pace, headline numbers remain volatile because of changes in the value of its large Bitcoin holdings. That dynamic made the report look weak on the surface, even as the company reiterated its long-term Bitcoin-focused strategy. A former U.S. government advisor has released a new briefing examining potential policy developments heading into 2026 and how they could influence markets.
The presentation focuses on historical context, upcoming milestones, and why some analysts believe next year could mark a significant turning point for long-term investors. It's designed to provide perspective and help readers understand what may be unfolding before it becomes widely discussed. View the full briefing here Heading into earnings, analysts projected adjusted earnings per share (EPS) of $46.02, compared with an EPS loss of $3.03 in the prior year. Mainly because of realized Bitcoin losses, Strategy missed that forecast by a wide margin, posting a loss of $42.93 for the quarter. What Every Investor Should Understand About StrategyStrategy is not a software company any more than GameStop Inc. (NYSE: GME) is a video game retailer. Although the company began in software, it has pivoted to act primarily as a Bitcoin treasury. In short, it's a leveraged play on Bitcoin that also generates some software revenue. That's an important distinction for investors to understand. The company has amassed a sizable Bitcoin position. At the end of 2025, Strategy reported owning 713,502 Bitcoin at a total cost of $54.26 billion, with an average cost of $76,052 per Bitcoin — roughly 3% of the world's Bitcoin supply. Strategy's Debt-Funded Bitcoin Bet Raises Leverage and Liquidation RiskHow Strategy financed those purchases is the larger issue. The company primarily financed Bitcoin acquisitions by issuing convertible debt in the form of secured notes. The takeaway: Bitcoin is Strategy's largest asset by far, but it's funded largely with debt — in other words, the company is leveraged to Bitcoin. If Bitcoin rises, the value of those holdings can increase faster than the debt, amplifying gains for shareholders. But if Bitcoin falls, losses are magnified — which is what we are seeing now. It gets worse. As of this writing, Bitcoin trades around $63,169, about 16% below Strategy's average purchase price. Remember that while Strategy still runs a software business, it's no longer the primary driver of the company's valuation. And even if it were, the software sector has faced its own headwinds during the recent tech-sector shakeout. Additionally, the recently adopted GENIUS Act has helped legitimize Treasury-backed stablecoins. Some analysts argue that weakens Bitcoin's transactional case and its positioning as a store of value. That brings us to the elephant in the room: could the company be forced to sell Bitcoin? According to Polymarket, the odds of a forced sale are roughly 26%. Strategy Stock Is Not for Every InvestorNo matter how it's framed, investing in Strategy is essentially investing in Bitcoin exposure. More precisely, investors in Strategy are taking leveraged bets on Bitcoin. That can produce strong returns when Bitcoin rallies, as it did for much of 2024. But when Bitcoin falls, as it has since late 2025, MSTR shares will likely slide further — the stock is down nearly 58% in the last three months. Of course, gains and losses are unrealized until an investor sells. Those who believe Bitcoin will recover and who can hold through volatility may view the current decline as a buying opportunity. For now, analysts still maintain a consensus price target on MSTR stock of $417.38, which would represent a roughly 290% gain from its closing price on Feb. 5. However, given the ongoing Bitcoin selloff, betting on MSTR increasingly resembles taking a high-stakes speculative wager — which is precisely why it represents asymmetric risk.
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