Strategy Surges 5.7% As Q3 Earnings Beat Expectations, Saylor Says Firm Unlikely To Buy Rivals

Strategy shares soared almost 6% in after-hours trading after the Bitcoin treasury firm’s third-quarter results topped analyst forecasts and Michael Saylor said it’s unlikely to buy smaller rivals.

The company reported diluted earnings per share of $8.42 for the three months ended Sept. 30, above Wall Street’s estimate of $8.15.

Revenue reached $2.8 billion, rebounding from a $340.2 million loss a year earlier but well below its record $10 billion profit in the previous quarter.

Despite the stronger results, Strategy’s stock remains under pressure, down more than 20% in the past month and over 30% in six months as Bitcoin’s decline weighs on its $47.4 billion crypto holdings.

Strategy (MSTR) closed the latest trading day down more than 7%, according to Google Finance. 

Strategy share price (Source: Google Finance)

Saylor Says It’s Unlikely Strategy Will Buy Smaller Rivals

Firms including Japan-based Metaplanet and leading Ethereum treasury firm BitMine Immersion Technologies have suffered double-digit stock price drops recently, and smaller digital asset treasury (DAT) firms have struggled.

That’s prompted analysts to predict that larger DAT firms may begin buying up smaller rivals

But Saylor said Strategy has no immediate plans for mergers or acquisitions, citing “a lot of uncertainty” among digital asset treasuries.

“We don’t have any plans to pursue M&A activity, even if it would look to be potentially accretive,” he said. “An idea that looks good when you start might not still be a good idea six months later.” 

Saylor didn’t close the door on acquisitions completely, saying “I don’t think we would ever say ‘we would never, never, never, ever’.” 

Price Declines Put Pressure On Strategy’s Bitcoin Treasury Performance

Strategy is the largest corporate Bitcoin holder globally, with 640,808 BTC on its balance sheet. It started purchasing Bitcoin back in 2020, and has continued buying the leading crypto even as some of its competitors slow down or halt accumulation strategies. 

Top 10 largest corporate BTC holders (Source: Bitcoin Treasuries)

It bought another 390 BTC for around $43.4 million earlier this week at an average purchase price of $111,053. 

Bitcon’s 4% slide in the past month and Strategy’s stock price decline have also put pressure on Strategy’s BTC treasury performance, with the company’s mNAV falling from its November peak of 3.89x to 1.16x now, according to SaylorTracker. 

Despite the decreased mNAV, Strategy reported that its Bitcoin yields have hit 26% so far this year at a $13 billion gain. The company also reaffirmed its full-year outlook of hitting a 30% BTC yield with a net income of $24 billion. This is based on its estimation that the Bitcoin price will reach $150,000 by the end of the year. 

With Bitcoin trading at $109,898.61 as of 1:50 a.m. EST, BTC’s price would have to climb around 36% to achieve Strategy’s year-end target.