Michael Saylor’s Strategy to Increase Bitcoin Holdings Revealed
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On February 23, Michael Saylor’s company, Strategy, is set to disclose another significant acquisition of Bitcoin. Details regarding the investment amount and the financing methods will remain undisclosed until a formal filing is made with the SEC, as required by U.S. law. This news comes at a time when another major player in the cryptocurrency market, Bitdeer, has opted to sell its Bitcoin holdings in a bid to secure capital for its operational expansion.
Recently, due to the value of its preferred shares, denoted as $STRC, Strategy has been in a position to issue new shares. It’s anticipated that this week’s fundraising efforts will involve a combination of common and preferred shares, mirroring the approach taken the previous week. This strategy is seen as more favorable than solely issuing common shares, which could dilute existing shareholders and lower the market net asset value (mNAV), complicating future fundraising unless there’s a recovery in share price.
Fans of Saylor eagerly await his Sunday updates on social media, where he often shares a chart illustrating his historical Bitcoin purchases. Although the specific amount of Bitcoin acquired is not disclosed, he frequently references the upward trajectory of these acquisitions.
The company’s purchasing strategy typically involves executing trades as soon as capital is secured, distributing orders to mitigate any significant price impacts. Observing the average purchase prices reported, it appears most of these transactions occur early in the week. However, specifics of these transactions are not publicized by the company, leaving many details obscure.
The recent movement in the price of $STRC shares is notable, as they currently yield an annual dividend of 11.75%. As the price recuperates toward the $100 mark, it grants Strategy the opportunity to issue new preferred shares. The company has already reserved $2.25 billion for dividend payments, sufficient to cover all preferred shares for the next 30 months.
Contrary to the claims of some misinformation circulating, the company is not in financial jeopardy and does not require the sale of its Bitcoin to meet debt obligations or dividend distributions. As of now, Strategy boasts a substantial holding of 717,131 Bitcoin, with acquisitions dating back to 2020 and intensifying throughout 2024. Currently, they are facing unrealized losses exceeding $6 billion, largely due to a price correction of Bitcoin observed between last October and February.
Despite these challenges, the financial outlook for Strategy remains stable. Recent analyses indicate that the company can sustain operations with Bitcoin prices as low as $8,000 without necessitating the sale of its assets.
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