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Introduction
In a significant development for both Strategy (MSTR) and the cryptocurrency market, the company has announced a profit for the second consecutive quarter, largely driven by a robust increase in the price of Bitcoin (BTC). This remarkable performance positions MSTR favorably for potential inclusion in the S&P 500, a prestigious index that reflects the performance of 500 of the largest publicly traded companies in the U.S.
Q3 Profit: A Closer Look
According to Jeff Walton, Chief Risk Officer at Strive, Strategy is expected to report earnings of approximately $2.9 billion, translating to about $10 per share. This profit surge corresponds with Bitcoin’s impressive climb from around $107,000 to $114,000 by the end of the quarter. Over the last four quarters, MSTR has demonstrated a solid performance with an estimated earnings per share (EPS) of $22.80.
Understanding Deferred Tax Liability
The analysis also accounts for an estimated deferred tax liability of $970 million, which adjusts the net income to the aforementioned estimate of $2.9 billion. Importantly, the projected trailing twelve-month EPS highlights the company’s financial health, with positive EPS figures recorded for both Q2 and anticipated for Q3 2025.
Criteria for S&P 500 Inclusion
While a positive trailing twelve-month EPS is a critical criterion for S&P 500 inclusion, other factors come into play. These include:
- A positive latest quarter
- More than 50% public float
- An average daily trading volume exceeding 250,000 shares
MSTR fulfills all of these requirements, thereby enhancing its chances for inclusion. However, it’s essential to note that the S&P 500 committee is not obliged to add a company merely because it meets these criteria.
Upcoming S&P 500 Rebalancing
The fourth quarter 2025 S&P 500 rebalancing is set to take effect after market hours on December 19, creating anticipation among investors and analysts alike regarding MSTR’s potential inclusion.
STRC Dividend Rate Increase
In addition to its promising profit report, Strategy has also announced an increase in the dividend rate on its perpetual preferred stock, STRC, from 10% to 10.25%. This adjustment will be effective with cash dividends payable on October 31. Analyst Ben Werkman has indicated that future rates will be evaluated using the five-day volume-weighted average price (VWAP) of STRC before the final trading day of each month.
Current STRC Pricing and Future Outlook
Currently, STRC is priced at $97, which falls within the $95 to $98.99 range. This price increase of 25 basis points reflects Strategy’s commitment to raising the dividend rate to align with the stock’s $100 par value. The market reaction has been positive, with MSTR shares climbing by 2.9% in premarket trading, coinciding with a 3% rise in Bitcoin’s price to $116,700.
The Role of Bitcoin in MSTR’s Success
Bitcoin continues to play a pivotal role in shaping the financial landscape, and its influence on MSTR’s performance cannot be overstated. For those interested in understanding Bitcoin and its implications, resources on what XRP is or Bitcoin ETFs can provide deeper insights.
Conclusion
As Strategy (MSTR) experiences significant growth fueled by Bitcoin’s bullish price trajectory, the possibility of its inclusion in the S&P 500 looms larger. Investors should stay tuned for upcoming financial disclosures and market reactions leading up to the fourth quarter S&P 500 rebalancing. With a solid performance and increasing dividend rates, MSTR is a company worth monitoring closely in the evolving cryptocurrency landscape.
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Meta Description: “Discover how Strategy (MSTR) is leveraging Bitcoin’s surge to report profits and position itself for S&P 500 inclusion. Learn about the company’s financial performance, upcoming dividend increases, and what it means for investors.”
