Strategy Earns $20.9 Billion in Quarter, Also Sells $430 Million in Cryptocurrency At dawn on October 30th, Beijing time, Strategy (MSTR) released its third-quarter report. Operating profit reached $20.91 billion, which the company claims is its largest quarter ever. The following trading day, MSTR closed at approximately $130.5, down about 7.8% from the previous day's $141.62. Record profit, but falling stock price. After reviewing the financial report, I found the most noteworthy detail wasn't the largest single figure, but rather the smaller print at the end. I. Where Did the $20.9 Billion Come From? The report is straightforward: third-quarter operating profit was $20.91 billion, of which digital asset revenue also amounted to $20.91 billion. Software revenue totaled $125.4 million, a 3% decrease year-over-year. In other words, almost all of this quarter's profit came from fair value changes due to the rise in Bitcoin prices. This is book profit, not cash received from selling cryptocurrencies or software. The financial report also includes a comparison: MSTR's stock price rose 76% in Q3, while BTC rose 43%. With the price change, the accounting needs to be recalculated. The same applies to Q4. II. Holdings and Costs As of October 25th, Strategy held 848,517 BTC, a 26% increase year-to-date. The total cost was $64.02 billion, averaging approximately $75,446 per BTC. Based on the price of $81,200 on October 23rd, the company's market capitalization was $68.9 billion. As of 10:08 AM Beijing time today, BTC was trading at approximately $77,237 on Coinbase, about 2.4% higher than this average cost. III. Three Lines of Small Print The first line shows the BTC Yield. Year-to-date, it's -3.7%, equivalent to approximately 24,947 BTC. This is a metric defined by Strategy itself, showing how many Bitcoins are equivalent to per diluted share. The negative number indicates that the growth rate of diluted shares this year outpaced the growth rate of cryptocurrency holdings, meaning shareholders received less cryptocurrency per share. The second line shows cryptocurrency sales. The company has sold approximately $431.8 million worth of Bitcoin this year to pay part of preferred stock dividends and STRC buybacks. The board's authorization for selling cryptocurrency also includes: replenishing dollar reserves by up to $1.25 billion, paying maturing preferred stock dividends and interest, and repurchasing MSTR or digital credit securities. The third line shows buybacks. This year, the company repurchased 20,980,508 STRC shares, spending approximately $2.04 billion at an average price of $97.39, about 2.6% lower than the $100 par value. The $3 billion buyback program has approximately $956.7 million remaining, and the company says it will continue to buy STRC as long as the price remains below $100. The other $1 billion MSTR buyback program has not yet seen any purchases. IV. Cash Reserves To pay dividends and interest, the company has $4.83 billion in US dollar reserves and $242.4 million in cash, totaling approximately $5.07 billion, which, according to the company, can cover 3.4 years. The STRC dividend yield remains at 12.00%, and daily dividend payments will begin on November 1st. To date, a total of $1.48 billion in dividends has been paid out on all preferred shares. The more preferred shares held, the higher the annual fixed dividends payable. This money comes from three sources: continued financing, using US dollar reserves, or selling cryptocurrency. V. Personnel In the 8-K disclosure filed on the same day, CFO Andrew Kang informed the company on October 26th that he would step down on November 5th. The document states that it was for personal reasons and that there were no disagreements with the company regarding operations, policies, or practices. From November 6th to the end of the year, CEO Phong Le will concurrently serve as Chief Financial Officer. From January 1st, 2027, Executive Vice President of Operations Reza Virasteh will take over as CFO. VI. What I'll be looking at next: 1. The distance between the bitcoin:native price and the average cost of $75,446. 2. Whether STRC can return to around $100, and how much of the buyback quota remains. 3. The amount spent on buying, selling, and buybacks each week in 8-K. 4. When will the BTC Yield turn positive? The $20.9 billion on the profit statement, and the amount of coins distributed per share and the fixed dividends paid annually are two separate accounts. To understand Strategy, both must be considered together. The above is compiled from publicly available information and does not constitute investment advice.