Strategy sold 1,395 bitcoin in Q2 — and used the cash for preferred dividends
Q2 10-Q: $400m of quarterly preferred dividends is 108× the software business's net income. 846,000 bitcoin carried at an average cost of $75,578, marked at 78% of cost
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Strategy Inc Form 10-Q for Q2 2026 (filed 2026-08-03): Note 3 'Digital Assets', Note 10 'Redeemable Preferred Stock', Note 13 'Segment Information', Note 15 'Subsequent Events', MD&A 'Liquidity and Capital Resources', consolidated statement of cash flows
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Strategy Inc (MSTR), the company known for accumulating bitcoin, sold 1,395 bitcoin in the second quarter of 2026. In the 10-Q filed August 3, the company says the proceeds were used to fund preferred stock dividends. Cash dividends on preferred stock reached $400.2m in the quarter — 108 times the $3.7m net income of its software business. At June 30, its 846,000 bitcoin were worth $14.27bn less than the company paid for them.
What happened
Strategy Inc (MSTR) started as an enterprise analytics software vendor and, since 2020, has spent its capital buying bitcoin. It was called MicroStrategy until last year. Among retail investors it trades as a proxy for bitcoin itself.
Note 3 of the 10-Q it filed on August 3 shows that in the second quarter the company sold 1,395 bitcoin for $83.2m. The comparative column for the same period of 2025 shows no sales. Footnote (e) to the holdings table in the MD&A gives the reason in one line: "The proceeds from the sales were used to fund dividend payments on Preferred Stock."
Cash dividends paid on preferred stock in the quarter were $400.2m, up from $49.0m in the same quarter a year earlier, because the amount of preferred stock outstanding has grown sharply. At June 30 the five series carried a combined liquidation preference of $15.46bn, with dividend rates from 8% (STRK) to 11.5% (STRC, for June). The company puts its expected preferred dividends and bond interest for the next 12 months at about $1.76bn.
At June 30 Strategy held 846,000 bitcoin with a cost basis of $63.94bn and a fair value of $49.67bn — 77.7% of cost. At December 31 the fair value had been 116.7% of cost.
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Note 3 'Digital Assets' shows 1,395 bitcoin sold in Q2 for $83.2m. Footnote (e) to the holdings roll-forward in the MD&A states: 'The proceeds from the sales were used to fund dividend payments on Preferred Stock.' Note 15 adds a further 2,225 bitcoin sold from July 1 to 24 for $135.2m at an average of $60,773.
Has Strategy stopped buying bitcoin?
No. It bought 85,296 bitcoin for $6.42bn in Q2. The 1,395 sold equal 1.6% of what it bought. But in June the board authorized a 'BTC Monetization Program' that allows bitcoin sales to fund dividends, interest, the USD Reserve and buybacks.
How does the company afford the dividends?
First-half operating cash flow was $9.9m; preferred dividends paid were $629.2m. The difference came from selling new common and preferred shares — $15.76bn net in the first half. In June the company adopted a policy to hold 12 months of dividends and interest (about $1.76bn) in a USD Reserve, which stood at $2.40bn at June 30.
Where can I check these numbers?
Open Strategy Inc's Q2 2026 Form 10-Q on SEC EDGAR (accession 0001050446-26-000044) and read Note 3, Note 10, Note 13, Note 15 and the MD&A section 'Liquidity and Capital Resources'.
Revision history
— Removed 'for the first time' / 'never selling' from title and lead — this 10-Q only shows no sales in the 2025 comparative period; earlier years are outside its scope. No figures changed.
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Strategy Inc Form 10-Q for Q2 2026 (filed 2026-08-03): Note 3 'Digital Assets', Note 10 'Redeemable Preferred Stock', Note 13 'Segment Information', Note 15 'Subsequent Events', MD&A 'Liquidity and Capital Resources', consolidated statement of cash flows · SEC EDGAR · This article is not investment advice. Disclaimer
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