Strategy, the company formerly known as MicroStrategy, reported the largest quarterly profit in its history on October 29: operating income of $20.9 billion. The next day its stock closed down nearly 8%, and its chief financial officer is leaving. The two facts are connected by a quirk of accounting, and the quirk is the story.

What Strategy reported

According to Strategy’s results and filing, operating income for the quarter ended September 30 was $20,909.8 million, against $3,890.8 million a year earlier. The gain on digital assets was $20,912.4 million, slightly more than the whole operating income, so by our arithmetic the software business roughly broke even or lost a few million. Net income was $19.53 billion, or $19.12 billion after $419.6 million of preferred dividends, which works out to diluted earnings per share of $44.75. Revenue was $125.4 million, down 3%. For the first nine months of 2026, Strategy still shows a net loss of about $1.23 billion.

Why a record profit did not lift the stock

Since adopting an accounting standard known as ASU 2023-08, Strategy marks its bitcoin to market every quarter and books the change in net income. Under the older rule, it could only write holdings down. A rising price therefore shows up as profit even if no coin is sold, and a falling price shows up as a loss, which is why the second quarter was a loss and the third a record. The profit reflects bitcoin’s rise during the quarter, not the software company’s performance. Strategy sold 5,552 bitcoin in the quarter while buying 7,218, so part of the gain may be realized.

Investors have noticed that bitcoin has since fallen. The company holds 848,517 bitcoin as of October 25, bought for a total of $64.02 billion at an average of about $75,446 each. Bitcoin traded near $77,400 on October 31 per Coinbase data cited by FinanceFeeds, so by our arithmetic the holdings are worth roughly $65.7 billion, only about 2.6% above cost. Strategy’s own figure at about $81,200 on October 23 was $68.9 billion. The stock closed at $141.62 on October 29 and $130.51 on October 30, down 7.84% according to StockAnalysis, which our own calculation matches. CoinDesk’s “6%” was the pre-market move. For earlier coverage of the same split among holders, see our report on how corporate bitcoin treasuries are diverging.

The premium has shrunk

The stock’s value relative to its bitcoin, known as mNAV, is the figure the market watches. Management put it at 1.15 times as of October 23 on its earnings call, with market capitalization near $62 billion. The company said median daily mNAV was 2.28 in 2021, 2.57 in 2023 and 2.60 in 2024. When the premium was large, Strategy could issue stock and buy more bitcoin than the issuance cost. At 1.15, there is much less room. Net proceeds from selling common stock were about $5.41 billion in the third quarter but only $58.7 million in the fourth quarter through October 23, and the board has authorized up to $1.25 billion of bitcoin sales to fund its dollar reserve.

The obligations behind the bitcoin

Strategy reports about $6.7 billion of debt, mostly convertible notes, and roughly $13.3 billion notional of preferred stock, of which its STRC preferred is about $8.4 billion and pays 12%. The 8-K shows a liquidation preference of $14.11 billion, and we could not reconcile the two measures. Preferred dividends were $419.6 million in the third quarter. Strategy holds a USD reserve of $4.83 billion, which it says covers about 3.4 years of dividends and interest. No annual total is stated, and by our own estimate the yearly obligation is about $1.5 billion to $1.7 billion. Daily dividend payments on STRC begin November 1, and on other preferreds January 1, 2027, with annual amounts unchanged. The company’s own filings describe each instrument in full; our glossary covers the stablecoin terms used elsewhere on this site.

The CFO’s exit

Chief financial officer Andrew Kang told the company on October 26 that he would resign for personal reasons, with no disagreement cited, according to the 8-K. His resignation is effective November 5, and he stays as an adviser through December 31 with a lump-sum payment of $883,400. President and CEO Phong Le becomes principal financial officer from November 6 through December 31. Reza Virasteh, currently executive vice president of finance and operations, becomes CFO on January 1, 2027, and Shelley Khanna becomes chief accounting officer on November 6. The company says from January Virasteh would cover the software business and Le the bitcoin business, according to a report of the call.

Index questions

Strategy is not a member of the S&P 500, and was passed over at the September rebalance; the next quarterly review is in December. The eligibility rules require positive earnings for the latest quarter and the trailing four quarters, and one analysis suggests the four-quarter total remains negative despite the third-quarter profit, though we could not verify that independently. MSCI finalized on October 15 and 16 a framework for companies it classifies as non-operating, using an operating-asset screen and financial ratios. According to TFTC, the final list is due November 11, with any removals effective December 1, and existing members would have to fail in two consecutive reviews to be removed. Estimates of possible forced selling range widely and are poorly sourced, so we do not repeat them.

What we could not confirm

We could not open the SEC’s EDGAR site, so 8-K figures come from a StockTitan mirror that matches Strategy’s press release. The quarter-end bitcoin price is not in the filing; call summaries put it near $83,600, and carrying value divided by holdings gives about $83,550. The preferred stock totals differ between the call and the filing, and the MSCI timing comes from a single source.

Why it matters

Strategy is the largest corporate bitcoin holder and a bellwether for the whole treasury-company model. The quarter shows how fair-value accounting turns bitcoin’s swings into headline profit and loss, and how the market looks past it to what matters: how much of a premium investors will still pay, whether dividends can be covered if bitcoin falls, and who is running the finance function. The next markers are Kang’s November 5 departure, MSCI’s November 11 list and the December S&P review. This is reporting, not investment advice.

Further reading

Frequently asked

How much profit did Strategy report for the third quarter of 2026?

Operating income was $20.9 billion and net income was $19.5 billion, or $19.1 billion after preferred dividends. Nearly all of it came from the rise in bitcoin’s price during the quarter, recorded under fair-value accounting.

Why did Strategy’s stock fall after a record quarter?

The profit mostly reflected bitcoin’s earlier rise, and bitcoin had since fallen. Investors also focus on how much premium the stock carries over its bitcoin holdings, which management put at 1.15 times, far below earlier years. The stock closed down 7.84% on October 30.

How much bitcoin does Strategy hold?

848,517 bitcoin as of October 25, bought for a total of $64.02 billion at an average of about $75,446 each, according to the company. At about $77,400 per bitcoin, holdings would be worth roughly $65.7 billion by our arithmetic.

Who is Strategy’s CFO, and who is replacing him?

Andrew Kang resigns effective November 5, citing personal reasons, according to the 8-K. CEO Phong Le serves as principal financial officer from November 6 through December 31, and Reza Virasteh becomes CFO on January 1, 2027.

Is Strategy in the S&P 500?

No. It was passed over at the September rebalance, and the next quarterly review is in December. Separately, index provider MSCI’s final list under its new non-operating company framework is due November 11, according to TFTC.