Strategy Inc. has made another significant purchase of 1,955 bitcoins to its treasury to further entrench its status as the world’s largest corporate holder of bitcoin. The latest total purchase price for the acquisition of the bitcoins was approximately $217.4 million. The purchase further demonstrates Strategies long-term commitment to bitcoin as its core reserve asset. This latest acquisition brings Stratefys total holdings to an eye-watering 638,460 BTC, continuing its distinctive, and sometimes controversial, financial trajectory. The announcement of the acquisition was made through a U.S. Securities and Exchange Commission (SEC) filing, providing further details on Strategy’s continued development via an aggressive and persistent accumulation strategy.
Aggressive Accumulation Strategy
The latest bitcoin purchase occurred between September 2 and September 7, with Strategy paying an average price of approximately $111,196 for each bitcoin, after all fees, and expenses. The price at the time reflected a continued belief in the current and the increase in value of bitcoin as the price of the asset still increases. The full purchase was financed using proceeds from Strategy issuing and selling various securities of the company including its common and preferred stocks. This a tactic which has become associated with the company, using proceeds from a combination of equity and debt issue to continuously grow its bitcoin position.
The ‘At-the-Market’ Funding Model
Strategy’s method for financing its bitcoin purchases is as notable as the buys themselves. The company utilizes multiple “at-the-market” (ATM) offering programs to sell shares directly into the open market at prevailing prices. This method gives it a flexible and continuous source of capital with little disruption to the market, which is a clear advantage over traditional larger stock offerings. Specifically, the recent bitcoin buy was funded from numerous sales of its Class A common stock (MSTR) and perpetual preferred stocks (STRK and STRF). This capital raising mechanism has allowed this company to have a consistent pace of bitcoin accumulation without using any more operational related cash flows.
The Bigger Picture: A Growing Bitcoin Treasury
With this last purchase, Strategy now holds a total of 638,460 BTC of bitcoin. The company has spent an aggregate cost basis for all its holdings of roughly $47.2 billion with an average cost of roughly $73,880 for each bitcoin. The approximate market value of its assets is just about $71 billion suggesting a potential paper gain of about $24 billion. This result confirms what the organization believes: bitcoin represents a better store of value in the long term and is a novel substitute for perpetual treasury-like assets.
More Than Just a Company: A Bitcoin Proxy
For some investors, Strategy has moved from an enterprise analytics software company to an indirect bitcoin investment vehicle. The stock’s performance and cryptocurrency price movement are correlated, allowing investors to get exposure to bitcoin, without direct investing, in a public company. Under the direction of its Executive Chairman, Michael Saylor, it has developed a corporate bitcoin strategy, which others are starting to follow. Saylor’s public advocacy and consistent messaging have helped shape Strategy’s image and its bold financial direction.
S&P 500 Snub and the Saylor Mindset
The recent bitcoin purchase followed a notable development: Strategy was not included in the S&P 500 index despite meeting all the criteria and being one of the largest firms by market cap outside the index. The index added other companies instead, effective on September 22. Saylor’s response to the snub was a simple yet telling post on social media: “Thinking about the S&P right now…,” accompanied by a chart illustrating Strategy’s outperformance against the S&P 500 and bitcoin since it adopted its treasury strategy. It was such a classic Saylor move, affirming the firm’s belief that its success is based not on typical Wall Street validation, but on the long-term upside of its apparently undiversifiable bitcoin position.
