Strategy Inc. (NASDAQ: MSTR) made a significant move last week by acquiring 10,624 Bitcoin for $962.7 million, despite its stock price facing a severe downturn. The purchase boosts the company’s total Bitcoin holdings to 660,624 BTC, valued at approximately $49.35 billion. This acquisition comes amid a challenging period for Strategy, as its stock price has dropped nearly 60% over the past six months.
Saylor’s Commitment to Bitcoin
CEO Michael Saylor remains steadfast in his commitment to accumulating Bitcoin as part of the company’s long-term strategy. Saylor has consistently rejected the idea of selling Bitcoin to fund dividends, instead opting to maintain a robust cash cushion. With $1.44 billion in cash reserves, Strategy can sustain itself for nearly two years without relying on stock market performance.
As Strategy increases its Bitcoin holdings, it faces mounting competition from major financial institutions. Companies like JPMorgan and Morgan Stanley have begun launching Bitcoin-linked products, offering institutional investors controlled exposure to the cryptocurrency. This competition challenges Strategy’s position as the dominant corporate Bitcoin holder.
Financial Challenges Persist
Despite the Bitcoin accumulation, Strategy’s stock price has struggled to recover. The company’s shares have remained stagnant, fluctuating between $170 and $215, with no significant rallies in sight. Investors are concerned about the company’s future prospects as resistance levels persist, and short-sellers have targeted the stock.
In an effort to address the ongoing financial challenges, Strategy introduced perpetual preferred shares. Saylor believes these shares will provide a fresh opportunity for the company in the next 12 to 24 months. The introduction of these shares reflects Strategy’s ongoing efforts to diversify its financial strategy, despite the bearish stock performance.
The growing interest in Bitcoin from traditional financial institutions, such as JPMorgan and Morgan Stanley, has led to increasing scrutiny of Strategy’s role in the market. As more firms, including Metaplanet, adopt Bitcoin-heavy treasury strategies, the competition for Bitcoin exposure continues to intensify. Consequently, Strategy faces greater challenges in maintaining its position as the primary corporate Bitcoin accumulator.