Another week, another significant bitcoin acquisition for Strategy. The company, a name synonymous with corporate bitcoin treasuries, just added nearly 2,000 more of the digital asset to its already impressive holdings. It’s a move that keeps the crypto world buzzing, and one that highlights Strategy’s unique market position.
- Strategy recently acquired nearly 2,000 bitcoin for approximately $217.4 million, increasing its total holdings to 638,460 BTC, valued around $71 billion.
- These acquisitions are funded through at-the-market (ATM) sales of the company’s common and preferred stocks, as part of its ambitious “42/42” plan to raise $84 billion for bitcoin purchases by 2027.
- Despite strong performance, Strategy was notably excluded from the S&P 500, a decision that Michael Saylor countered by highlighting the company’s significant outperformance against both the S&P 500 and bitcoin.
Between September 2 and September 7, Strategy acquired 1,955 bitcoin. This purchase cost roughly $217.4 million, with an average price of $111,196 per bitcoin. The details came to light through a recent 8-K filing with the Securities and Exchange Commission.
This latest acquisition pushes Strategy’s total bitcoin holdings to a staggering 638,460 BTC. Michael Saylor, the company’s co-founder and executive chairman, confirmed these numbers. He noted the total value sits around $71 billion.
Strategy acquired this massive stash at an average price of $73,880 per bitcoin. The total cost, including fees and expenses, comes to about $47.2 billion. This means the company is currently sitting on estimated paper gains of $24 billion.
To put Strategy’s holdings in perspective, 638,460 BTC represents more than 3% of Bitcoin’s entire 21 million supply. It’s a concentration that few, if any, other public companies can match.
How does Strategy fund these consistent, large-scale purchases? The latest acquisitions used proceeds from at-the-market (ATM) sales. These sales involved the company’s Class A common stock, MSTR, and its perpetual preferred stocks, STRK and STRF.
Strategy has a range of preferred stocks, each with its own flavor. STRD is non-convertible, offering a 10% non-cumulative dividend. It carries the highest risk-reward profile, for those who like a bit of a thrill.
Then there’s STRK, which is convertible. It offers an 8% non-cumulative dividend, giving investors a chance at equity upside. STRF, on the other hand, is non-convertible with a 10% cumulative dividend, making it the most conservative option in the bunch.
STRC is a variable-rate, cumulative preferred stock. It pays monthly dividends, with adjustable rates designed to keep its value close to par. It’s a bit like a steady boat in choppy waters.
These preferred stock ATM programs are substantial. STRK has a $21 billion program, STRC $4.2 billion, STRF $2.1 billion, and STRD another $4.2 billion. These programs are part of Strategy’s ambitious “42/42” plan.
The “42/42” plan aims to raise a total of $84 billion. This capital comes from equity offerings and convertible notes, all earmarked for bitcoin acquisitions through 2027. This plan was actually upsized from an initial “21/21” plan, which targeted $42 billion, after the equity side was fully utilized.
The S&P 500’s Cold Shoulder
Before the latest filing, Michael Saylor gave his usual subtle hint. He shared an update on Strategy’s bitcoin acquisition tracker on X, simply stating, “needs more orange.” For those who follow Saylor, this was a clear signal of more bitcoin coming.
Strategy’s Q2 financial results included a commitment. The company stated it would not issue common equity if its market cap to net asset value (mNAV) ratio fell below 2.5x. This was meant to be a clear guideline.
However, just two weeks later, Strategy clarified its stance. It would, in fact, issue MSTR below the 2.5x mNAV ratio if it deemed the issuance “advantageous to the company.” This shift, aimed at greater flexibility, caused some confusion among market participants.
Last week, Strategy had already reported another significant purchase. It bought 4,048 BTC for $449.3 million, bringing its total holdings to 636,505 BTC at that time. The pace of these buys had slowed for a bit.
The company had been shifting its focus from common stock ATM programs to its perpetual preferred stocks for funding. But renewed MSTR issuance has recently led to larger purchases again, showing a renewed vigor in their bitcoin strategy.
Then came the S&P 500 news. Despite strong quarterly results and meeting all the criteria, Strategy was passed over for inclusion. It stood as one of the top three largest firms by market cap outside the S&P 500.
Instead, the index added AppLovin, Robinhood, and EMCOR Group. These changes will take effect on September 22. The next opportunity for Strategy’s inclusion will be during the rebalancing scheduled for December.
S&P 500 inclusion could have been a major boost for Strategy. It would force passive funds to buy its shares, exposing the company to millions of new investors. Bloomberg analyst James Seyffart estimates $22 trillion is associated with products tracking or benchmarked against the index.
Saylor’s response to the snub was classic Saylor. He posted on X, “Thinking about the S&P right now…,” alongside a chart. The chart highlighted Strategy’s impressive outperformance against both the S&P 500 and bitcoin since it adopted its bitcoin treasury strategy. A picture, they say, is worth a thousand words.
A Shifting Landscape for Corporate Bitcoin Treasuries
Strategy isn’t alone in its bitcoin embrace. According to Bitcoin Treasuries data, 171 public companies have now adopted some form of bitcoin acquisition model. It seems the idea of holding bitcoin on the balance sheet has truly taken root.
Beyond Strategy, a few other names stand out in the corporate bitcoin space. MARA holds 52,477 BTC. Twenty One, backed by Tether, has 43,514 BTC. Bitcoin Standard Treasury Company, supported by Adam Back and Cantor Fitzgerald, holds 30,021 BTC.
Bullish has 24,000 BTC. Metaplanet holds 20,000 BTC. Riot Platforms has 19,239 BTC. President Trump Media & Technology Group holds 15,000 BTC. CleanSpark has 12,703 BTC, and Coinbase rounds out the top ten with 11,776 BTC.
While the number of companies holding bitcoin grows, some might wonder about the health of this trend. The value of many shares in this cohort has seen a significant drop from their summer highs. It’s a bit like a rollercoaster ride, with some steep descents.
For example, David Bailey’s Kindly MD (NAKA) has plunged 84%. Metaplanet has dropped 64%. Even Strategy itself, MSTR, is down 26% from its peak. These numbers raise questions about the sustainability of the “corporate bitcoin treasury” model for some.
Adding to the market’s watchful eye, Nasdaq recently announced tighter oversight. It will scrutinize companies raising funds to buy crypto more closely. This could mean requiring shareholder votes for some deals and pushing for expanded disclosures. It’s a move to bring more transparency.
Michael Saylor, however, remains unfazed. He stated that Nasdaq’s new position does not affect Strategy. He believes it won’t impact its ATM programs or other capital markets activities. For Saylor, it’s business as usual.
MSTR closed up 2.5% on Friday at $335.87. This was in a week where bitcoin itself gained 1.9%. However, MSTR saw a 2% drop in pre-market trading on Monday.
Year-to-date, MSTR is down 11.9%. Bitcoin, by comparison, has seen an 18.7% gain over the same period. It shows that while Strategy holds bitcoin, its stock performance doesn’t always mirror the asset’s movements.
Strategy continues its singular focus, adding bitcoin with a determined pace. The market watches, the S&P 500 looks elsewhere, and other companies follow suit. It leaves us wondering what the next chapter holds for this bold strategy.
