Bitcoin treasury company Strategy (formerly MicroStrategy) acquired an additional 1,955 BTC for approximately $217.4 million at an average price of $111,196 per bitcoin between Sept. 2 and Sept. 7, according to an 8-K filing with the Securities and Exchange Commission on Monday.
Strategy now holds a total of 638,460 BTC — worth around $71 billion — bought at an average price of $73,880 per bitcoin for a total cost of around $47.2 billion, including fees and expenses, according to the company's co-founder and executive chairman, Michael Saylor. That's equivalent to more than 3% of Bitcoin's total 21 million supply and implies around $24 billion of paper gains.
The latest acquisitions were made using proceeds from at-the-market sales of its Class A common stock, MSTR, perpetual Strike preferred stock, STRK, and perpetual Strife preferred stock, STRF.
Of Strategy's perpetual preferred stocks, STRD is non‑convertible with a 10% non‑cumulative dividend and the highest risk‑reward profile. STRK is convertible with an 8% non‑cumulative dividend, allowing equity upside. STRF is non‑convertible with a 10% cumulative dividend, making it the most conservative. STRC is a variable‑rate, cumulative preferred stock offering monthly dividends, with adjustable rates designed to keep it near par.
Strategy's STRK, STRC, STRF, and STRD perpetual preferred stock's respective $21 billion, $4.2 billion, $2.1 billion, and $4.2 billion ATM programs are in addition to the firm's "42/42" plan, which targets a total capital raise of $84 billion in equity offerings and convertible notes for bitcoin acquisitions through 2027 — upsized from its initial $42 billion, "21/21" plan after the equity side was depleted.
S&P 500 snub
Saylor gave his usual hint at the likelihood of another bitcoin acquisition filing ahead of time, sharing an update on Strategy's bitcoin acquisition tracker on Sunday, stating, "needs more orange."
Strategy's bitcoin acquisitions. Image: Strategy.
In its Q2 financial results, Strategy committed not to issue common equity if its market cap to net asset value (mNAV) ratio is below 2.5x, except for specific purposes such as paying interest on debt obligations and funding preferred equity dividends. However, much to the confusion and frustration of many market participants, Strategy reneged on that guidance just two weeks later, clarifying that it will still issue MSTR below 2.5x mNAV if it deems the issuance to be "advantageous to the company" to provide greater flexibility in executing its capital markets strategy.
Last week, Strategy reported it had bought 4,048 BTC for $449.3 million, taking its total holdings to 636,505 BTC. The pace of Strategy's bitcoin buys had generally been slowing as it switched focus from its common stock ATM program to its perpetual preferred stocks for funding bitcoin acquisitions, but renewed MSTR issuance has resulted in larger purchases again over the past few weeks.
On Friday, despite strong quarterly results, meeting all the criteria, and being one of the top three largest firms by market cap outside of the S&P 500, Strategy was snubbed for inclusion, with the index adding AppLovin, Robinhood, and EMCOR Group, effective Sept. 22. The next rebalancing is scheduled for December.
S&P 500 inclusion could have been a major bullish catalyst, forcing passive funds to buy shares and exposing the company to millions of investors, with an estimated $22 trillion associated with products tracking or benchmarked against the index, according to Bloomberg analyst James Seyffart.
Responding after the news, Saylor posted simply, "Thinking about the S&P right now…," alongside a chart of Strategy's outperformance against the S&P 500 and BTC since adopting its bitcoin treasury strategy.
MSTR vs. SPY. Image: Strategy.
Has the corporate bitcoin treasury bubble popped?
According to Bitcoin Treasuries data, there are now 171 public companies that have adopted some form of bitcoin acquisition model. MARA, Tether-backed Twenty One, Adam Back and Cantor Fitzgerald-backed Bitcoin Standard Treasury Company, Bullish, Metaplanet, Riot Platforms, Trump Media & Technology Group, CleanSpark, and Coinbase make up the remainder of the top 10, with 52,477 BTC, 43,514 BTC, 30,021 BTC, 24,000 BTC, 20.000 BTC, 19,239 BTC, 15,000 BTC, 12,703 BTC, and 11,776 BTC, respectively.
While the number of bitcoin treasury companies continues to increase, the value of many of the cohort's shares is down significantly from their summer peaks, with David Bailey's Kindly MD (NAKA) plunging 84%, Metaplanet dropping 64%, and Strategy itself down 26%, for example.
This was exacerbated last week after Nasdaq announced it would be tightening oversight of companies raising funds to buy crypto, requiring shareholder votes for some deals and pushing for expanded disclosures. In response, Saylor said Nasdaq's new position doesn't affect Strategy, its ATM programs, or its other capital markets activities.
MSTR closed up 2.5% on Friday at $335.87, according to The Block's Strategy price page, in a week that saw bitcoin gain 1.9%. MSTR is currently down 2% in pre-market trading on Monday, per TradingView, and 11.9% year-to-date compared to bitcoin's 18.7%.
