There’s a company out there, Strategy by name, that seems to view Bitcoin as a perpetual bargain. Just recently, they added another significant chunk to their digital treasury. It’s a move that keeps the crypto world buzzing, and frankly, it’s hard not to watch this particular play unfold.
- Strategy recently acquired an additional 4,048 Bitcoin for approximately $449.3 million, bringing their total holdings to 636,505 BTC, valued at around $70 billion. This significant accumulation represents over 3% of Bitcoin’s total supply.
- The company funded this purchase through at-the-market sales of its various stock offerings, including Class A common stock (MSTR) and perpetual preferred stocks (STRK, STRF, STRD). These programs are part of a larger “42/42” plan to raise $84 billion by 2027.
- Despite some investor concerns about its valuation and market cap to net asset value (mNAV) ratio, Strategy’s leadership, particularly Michael Saylor, remains confident in its ability to withstand significant Bitcoin price drops due to its capital structure.
Between August 26 and September 1, Strategy acquired 4,048 more Bitcoin. This latest purchase cost them approximately $449.3 million. The average price paid per Bitcoin during this period was $110,981, according to an 8-K filing with the SEC.
This brings Strategy’s total Bitcoin holdings to a staggering 636,505 BTC. Michael Saylor, the company’s co-founder and executive chairman, shared that these holdings are now worth around $70 billion. They were bought at an average price of $73,765 per Bitcoin, for a total cost of about $47 billion, including fees.
Think about that for a moment. This single company now holds more than 3% of Bitcoin’s entire 21 million supply. It implies a paper gain of roughly $23 billion. Not bad for a company that started as a software firm, is it?
So, where did Strategy find the funds for this latest acquisition? They used proceeds from at-the-market sales of their various stock offerings. These included their Class A common stock, MSTR, and several perpetual preferred stocks: STRK, STRF, and STRD.
Specifically, Strategy sold 1,237,000 MSTR shares, bringing in $425.3 million. They still have $16.31 billion available for sale under that ATM program. They also sold 199,509 STRK shares for about $19 million, with $20.39 billion remaining in that program.
Another 237,931 STRF shares were sold for $26.5 million, leaving $1.8 billion. And finally, 12,973 STRD shares brought in $1 million, with $4.17 billion still available. It’s a complex web of financing, but the goal is always the same: more Bitcoin.
These preferred stocks each have their own flavor. STRD is non-convertible, offering a 10% non-cumulative dividend. It carries the highest risk-reward profile. STRK is convertible, with an 8% non-cumulative dividend, giving investors potential equity upside.
STRF, on the other hand, is non-convertible with a 10% cumulative dividend. This makes it the most conservative option among the three. Each offers a different way for investors to participate in Strategy’s Bitcoin-centric strategy.
These ATM programs for STRK, STRF, and STRD are part of an even larger capital plan. Strategy’s “42/42” plan aims to raise a total of $84 billion through equity offerings and convertible notes by 2027. This plan was actually upsized from an initial “21/21” plan, after the equity side was depleted.
The “Still on Sale” Mentality
Michael Saylor, true to form, hinted at this latest acquisition before it was officially filed. He shared an update on Strategy’s Bitcoin acquisition tracker on Sunday, stating simply, “Bitcoin is still on sale.” It’s a phrase that has become a mantra for the company and its followers.
In its Q2 financial results, Strategy had committed to not issuing common equity if its market cap to net asset value (mNAV) ratio fell below 2.5x. This was meant to be a clear guideline, offering some predictability to investors.
However, just two weeks later, Strategy clarified its stance. They stated they would still issue MSTR below the 2.5x mNAV ratio if they deemed it “advantageous to the company.” This move, providing greater flexibility, caused some confusion and frustration among market participants.
It’s a reminder that even with clear guidance, the dynamics of capital markets can shift. Companies sometimes need to adjust their strategies on the fly. This particular adjustment certainly raised a few eyebrows.
Just last week, Strategy had reported buying 3,081 BTC for $357 million. That purchase brought their total holdings to 632,457 BTC at the time. The pace of their Bitcoin buys had actually slowed in recent weeks.
The company had been switching focus from its common stock ATM program to its perpetual preferred stocks for funding. But renewed MSTR issuance saw larger purchases for the week ending August 24. It seems they are willing to use all tools at their disposal.
In other news, a class action lawsuit against Strategy was dropped last week. The lawsuit, filed in May, alleged that the company had made false and misleading statements about its investment strategy. This development removes one legal cloud hovering over the firm.
The Corporate Bitcoin Race
Strategy isn’t alone in its Bitcoin accumulation. According to Bitcoin Treasuries data, 163 public companies have adopted some form of Bitcoin acquisition model. It’s a growing trend, showing a broader institutional interest in digital assets.
Beyond Strategy, the top 10 public Bitcoin treasury companies include some familiar names. MARA holds 50,639 BTC, while Tether-backed Twenty One has 43,514 BTC. Bitcoin Standard Treasury Company, backed by Adam Back and Cantor Fitzgerald, holds 30,021 BTC.
Bullish has 24,000 BTC, and Metaplanet holds 20,000 BTC. Riot Platforms has 19,239 BTC, and President Trump Media & Technology Group holds 15,000 BTC. CleanSpark and Coinbase round out the top ten with 12,703 BTC and 11,776 BTC respectively.
While Strategy’s market cap to net asset value (mNAV) has been contracting lately, its $94.8 billion market cap still trades at a significant premium to its Bitcoin net asset value. This premium has raised concerns among some investors.
They worry about the firm’s valuation and its numerous Bitcoin acquisition programs. However, some analysts offer a different perspective. They argue that Strategy’s debt levels are relatively low, with no payments due until 2028.
This suggests the firm’s leverage remains manageable. Strategy’s mNAV currently sits at around 1.37x. It’s a number that sparks debate, depending on your view of the company’s long-term strategy and Bitcoin’s future.
Saylor himself remains confident in Strategy’s ability to weather storms. In an interview earlier this year, he stated that the company’s capital structure is designed to withstand a 90% drop in Bitcoin that lasts for four to five years.
He attributed this resilience to its mix of equity, convertible debt, and preferred instruments. He did acknowledge, however, that shareholders would still “suffer” in such a scenario. It’s a stark, yet honest, assessment of the risks involved.
MSTR closed down 1.3% on Friday at $334.41, in a week that saw Bitcoin fall around 2%. MSTR is currently up 11.4% year-to-date, compared to Bitcoin’s 17.4%. The company’s stock performance often tracks Bitcoin, but with its own unique twists.
As Strategy continues its ambitious Bitcoin accumulation, the market watches closely. Will Saylor’s conviction prove to be a masterstroke, or will the financial gymnastics eventually catch up? Only time, and the price of Bitcoin, will tell.
