Michael Saylor’s MSTR Buys More Bitcoin

Strategy (MSTR) continued its relentless bitcoin BTC$108,911.93 purchases, acquiring another 4,048 coins last week and bringing company holdings to 636,505 coins.

Last week’s buys were made for just under $450 million, or an average cost of $110,981 each. They were funded mostly through sales of common stock, with sales of the company’s various preferred shares making up the rest.

The common stock sales have been somewhat controversial of late as Saylor and team not long ago promised to never issue shares when the stock’s mNAV — the ratio of the stock valuation compared to value of bitcoin holdings — fell below 2.5x.

The rough ride for the stock of late though, has brought the mNAV to the 1.5x area. With apparently just modest demand for preferred stock and none for convertible debt, the company — if it wanted to continue to make sizable bitcoin purchases — had little choice but to scrap the mNAV 2.5x promise.

The problem with sales of common stock at such a modest premium to mNAV, say the naysayers, is that the issuance risks being dilutive to existing shareholders.

The company’s bitcoin holdings are worth just under $70 billion at bitcoin’s current price of $109,400.

MSTR shares are modest lower in premarket trading.