President Donald Trump has intensified his critique of stock buybacks, labeling them a deceptive method for inflating share prices. His comments specifically target defense contractors, highlighting a broader discussion about how companies manage their stock—either through buybacks that reduce share counts or by issuing new shares to fund growing initiatives, such as accumulating Bitcoin.
In January, Trump signed an executive order that restricts underperforming defense contractors from engaging in buybacks and paying dividends until they show improvements in production. He argues that buybacks artificially inflate stock prices without enhancing the company’s manufacturing capabilities. Instead, he advocates that this capital should be allocated towards investments in plants, equipment, and overall production efficiency.
His remarks resonate particularly with major defense contractors like Lockheed Martin, Northrop Grumman, and RTX, all of which have witnessed their stock prices affected by Trump’s criticisms in the past.
On the other end of the spectrum lies MicroStrategy, a company that has adopted a contrasting approach. Rather than repurchasing its common stock, MicroStrategy opts to issue new shares, including preferred stock, using the proceeds to acquire Bitcoin. This tactic has allowed the firm to amass more than 845,000 Bitcoin, equating to the largest Bitcoin treasury held by any publicly traded company.
MicroStrategy’s CEO, Michael Saylor, pitches these new share raises as strategic moves to grow Bitcoin per share. Currently, these holdings represent over four percent of all Bitcoin in circulation. The company has also made moves to buy back debt by repurchasing convertible notes at a discount, providing further flexibility to continue its purchasing strategy.
The effectiveness of MicroStrategy’s model hinges on a cycle of issuing stock at values higher than its Bitcoin holdings, subsequently enabling it to buy more Bitcoin and thus elevating its Bitcoin per share metric. This strategy can lead to a premium over the net asset value of the company. However, this premium has diminished in 2026, with Bitcoin prices hovering around $64,360—closely aligned with the average prices MicroStrategy has paid for its Bitcoin.
The company’s stock has seen a significant decline, dropping by more than half over the past year, as its market capitalization edges closer to $40 billion. In light of these challenges, the ability to raise new shares has become increasingly critical; if the premium continues to fade, investor confidence may dwindle, as the same dilution strategies that fueled earlier growth could offer less support in turbulent market conditions.
The contrasting approaches raise a significant question for shareholders and regulators alike: Are companies effectively building intrinsic value, or merely manipulating share prices? For MicroStrategy, this inquiry may ultimately hinge on whether Bitcoin can reclaim its previous highs, reviving the premium that once supported their stock value.
