TL;DR
- Strategy purchased 3,081 BTC for $356.9 million at an average price of $115,829, bringing its treasury to 632,457 BTC valued at over $70 billion.
- The company now holds $23.5 billion in unrealized gains, since its total historical acquisition cost amounts to $46.5 billion.
- The purchase was funded through stock and preferred share issuances under ATM programs, which still have more than $46 billion in available capacity.
Strategy added 3,081 bitcoin to its corporate balance sheet for a total of $356.9 million, lifting its treasury to 632,457 BTC worth more than $70 billion at current market prices.
The acquisition was made at an average of $115,829 per BTC and increased the company’s unrealized gains to around $23.5 billion, given that its historical acquisition cost stands at $46.5 billion.
The transaction was financed through various capital issuances under its at-the-market programs. Between August 18 and August 24, the company sold 875,301 common shares for $309.9 million. It also issued preferred securities: 210,100 STRK with an 8% coupon for $20.4 million, 237,336 STRF with a 10% coupon for $26.6 million, and 944 STRD, also with a 10% coupon, for $0.1 million. No STRC, a variable-rate preferred series, were sold. After these operations, Strategy retained issuance capacity of roughly $16.7 billion in common stock and more than $30 billion combined across its preferred series.
How Does Strategy Finance Itself?
Strategy’s funding model relies on the ability to issue common or preferred shares when its market capitalization trades well above the net value of its bitcoin holdings. With a market cap of about $112 billion compared to BTC holdings worth $70 billion, its stock is trading at roughly 1.6 times the net asset value of its bitcoin. For some analysts, that premium enables the company to raise capital at a lower cost and continue building its BTC position.
Investment bank TD Cowen recently reaffirmed a $680 price target for MSTR, noting that the company’s capital issuance remains accretive and its debt levels are manageable. At the same time, Strategy updated its ATM issuance guidance, tying the pace of share issuance to its market-to-NAV multiple. If the multiple stays high, the company will issue more stock to grow its reserves; if it drops, Strategy will prioritize obligations and may consider share buybacks.
Executive Chairman Michael Saylor highlighted the latest purchase with a social media post calling bitcoin “on sale” and pointing to the historical performance of the firm’s so-called “Bitcoin Standard.”
