Strategy, formerly known as MicroStrategy, has made headlines once again with its latest acquisition of approximately 525 Bitcoin for around $60 million. This purchase marks the firm’s smallest buy in a month but adds to its impressive total of roughly 639,000 Bitcoin, which is now valued at around $73 billion. The funding for this acquisition solely came from proceeds generated through the issuance of preferred shares rather than the typical route of selling common stock.
In previous weeks, Strategy has adopted a varied approach to its Bitcoin purchases. Last month, the company reported back-to-back acquisitions that did not rely on common share proceeds. Over this period, it cumulatively purchased 585 Bitcoin for roughly $67 million, indicating a more conservative buying strategy compared to its usual patterns. Notably, last week’s Bitcoin expenditure of $60.2 million left the firm with about $8 million in leftover cash from a recent fundraising round.
On the day of the latest acquisition, Strategy’s stock saw a slight decline of 2%, finishing at $325, while Bitcoin was trading around $115,000, experiencing a marginal decrease of 0.4% in the same timeframe. Despite some fluctuations, a recent poll from prediction market Myriad suggests that over 80% of participants anticipate Bitcoin to trade above $105,000 throughout September. The cryptocurrency had not fallen below that threshold since June.
In addition to its Bitcoin strategy, Strategy recently announced the listing of options for its preferred shares on the Nasdaq, having introduced four different types of shares this year. Some of these options allow conversion into common stock, while others impose regular dividend payment obligations. Furthermore, the firm has revised its equity issuance policy, stating that it would only sell common shares when trading at a premium of more than 2.5 times the value of its Bitcoin holdings—though this guidance has been recently updated to allow for issuance under “advantageous” conditions as well.
Currently, Strategy’s stock is trading at a 1.26x premium to its Bitcoin assets, down from 1.39x a month prior, and has not approached the 2.5x premium since November. Analysts have suggested that the self-imposed restrictions on equity issuance may have influenced this premium compression. Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered, pointed out that market saturation, with an influx of imitators in the Bitcoin treasury space, could also be impacting valuations. However, he noted that this scenario might present opportunities for consolidation, positioning Strategy as a likely active buyer in the event that smaller firms face financial distress.
