Core Insights - MicroStrategy's market cap briefly fell below the net value of its Bitcoin holdings, raising concerns about leverage, liquidity, and investor confidence [1][2] - The company holds 650,000 BTC valued at approximately $55.2 billion, but also carries $8.2 billion in debt, resulting in a net Bitcoin value of about $48.4 billion after accounting for cash reserves [2] - The stock price dropped to $156, leading to a valuation of $45 billion, which is $3.4 billion below its Bitcoin-adjusted worth at the session low [2] Market Reaction - The disconnect between MicroStrategy's stock price and its Bitcoin holdings shocked traders, as the company typically trades at a premium due to its aggressive Bitcoin strategy [3] - Following the sell-off, the company's mNAV ratio, which indicates how the stock trades relative to its Bitcoin net asset value, recovered to 1.16, significantly lower than earlier levels in 2025 [4] - The current market valuation places MicroStrategy only 16% above its Bitcoin holdings, compared to premiums exceeding 50% during the year's rally [4]

Core Insights - Strategy (MSTR) is expected to report a profit for the second consecutive quarter in Q3, driven by an increase in bitcoin prices, which may qualify the company for potential inclusion in the S&P 500 [1][3] - The estimated net income for MSTR is projected at $2.9 billion, translating to approximately $10 per share, with trailing twelve-month earnings per share (EPS) estimated at $22.80 [2][3] - MSTR meets several criteria for S&P 500 inclusion, including positive latest quarter results, over 50% public float, and average daily trading volume exceeding 250,000 shares [3] Financial Performance - MSTR's earnings for the past four quarters are estimated to be around $22.80 per share, with Q2 and Q3 2025 projected EPS of $32.6 and $10.1, respectively [2] - The analysis includes a deferred tax liability of $970 million, which impacts the net income calculation [2] Dividend Information - Strategy has increased its dividend rate on perpetual preferred stock STRC from 10% to 10.25%, with cash dividends payable on October 31 [4] - The current price of STRC is $97, and the company plans to continue raising the rate to approach its $100 par value [4] Market Reaction - MSTR shares rose by 2.9% in premarket trading, coinciding with a 3% increase in bitcoin prices to $116,700 [5]