Strategy (Nasdaq: MSTR) continues its aggressive Bitcoin accumulation strategy, announcing the acquisition of 10,624 bitcoin for approximately $962.7 million in cash during the week of December 1 through December 7, 2024. This latest purchase, disclosed in a regulatory filing on Monday, brings the company’s total Bitcoin holdings to an impressive 660,624 BTC, solidifying its position as one of the largest corporate holders of the cryptocurrency.
Strategic Acquisition Details
The company paid an average price of $90,615 per bitcoin during this acquisition period, representing a significant premium to its historical average purchase price. Strategy’s total Bitcoin holdings now carry an average purchase price of approximately $74,696 per bitcoin across all acquisitions, demonstrating the company’s long-term commitment to accumulating the digital asset regardless of short-term price fluctuations.
The funding for this latest bitcoin purchase came entirely through the strategic sale of the company’s equity securities under its at-the-market offering programs. Strategy raised total net proceeds of $963.0 million from these equity sales during the reported period, effectively matching the capital deployed for the Bitcoin acquisition.
Equity Financing Breakdown
The company’s financing strategy for this purchase relied heavily on common stock sales, with approximately 96% of total capital raised during the week coming from this source. Strategy sold 5,127,684 shares of Class A Common Stock, generating $928.1 million in net proceeds. This approach allows the company to tap into investor demand for exposure to Bitcoin through traditional equity markets while avoiding debt obligations.
The remaining 4% of proceeds came from the sale of preferred equity instruments. Strategy sold 442,536 shares of its 10.00% Series A Perpetual Stride Preferred Stock (Nasdaq: STRD), generating $34.9 million in net proceeds. This diversified approach to capital raising provides the company with flexibility in matching investor preferences while maintaining its Bitcoin acquisition momentum.
Substantial Capital Reserves for Future Acquisitions
Perhaps most notable in the regulatory filing is the revelation of Strategy’s significant remaining capacity under its various equity offering agreements. As of December 7, the company had approximately $13.45 billion available for issuance and sale under its Class A Common Stock program alone. This substantial dry powder suggests that Strategy’s Bitcoin accumulation strategy is far from complete and could accelerate significantly in the coming months.
The company’s preferred stock programs offer even more striking capacity for future capital raises. Strategy has $20.34 billion available under its 8.00% Series A Perpetual Strike Preferred Stock (Nasdaq: STRK) program, representing the largest single tranche of available capital. Additionally, the company maintains $4.10 billion in availability for the Stride Preferred Stock (Nasdaq: STRD), $4.04 billion for the Variable Rate Series A Perpetual Stretch Preferred Stock (Nasdaq: STRC), and $1.64 billion for the 10.00% Series A Perpetual Strife Preferred Stock (Nasdaq: STRF).
Combined, these equity programs provide Strategy with over $43 billion in potential capital-raising capacity, signaling the company’s intention to continue serving as a vehicle for investors seeking Bitcoin exposure through traditional securities markets.
Market Performance and Valuation Metrics
Despite the continued Bitcoin accumulation, Strategy’s stock performance has faced headwinds in recent trading sessions. Shares closed at $178.99, reflecting a decline of 25.07% month-to-date and a more significant drop of 40.34% year-to-date. This price action suggests that investors may be digesting the dilutive effects of the company’s aggressive equity issuance strategy or responding to broader market volatility.
However, the company continues to trade at a premium to its net asset value, with a multiple of 1.13x mNAV at the time of the disclosure. This premium indicates that investors are willing to pay more than the underlying value of Strategy’s Bitcoin holdings, potentially reflecting expectations of future appreciation, the convenience of Bitcoin exposure through a publicly-traded security, or confidence in management’s capital allocation strategy.
The Broader Context of Corporate Bitcoin Adoption
Strategy’s continued accumulation of Bitcoin represents one of the most ambitious corporate treasury strategies in the digital asset space. The company has effectively transformed itself from a traditional business intelligence software company into a Bitcoin treasury company, using its access to capital markets to accumulate what it views as a superior treasury reserve asset.
This approach has sparked debate among investors and analysts about the sustainability and wisdom of such an aggressive strategy. Supporters argue that Strategy is positioning itself to benefit from Bitcoin’s long-term appreciation potential while providing traditional investors with regulated, accessible exposure to the cryptocurrency. Critics point to the risks of concentration, the dilutive nature of constant equity issuance, and the volatility inherent in holding such a large position in a single digital asset.
Looking Ahead
With over $43 billion in remaining capital-raising capacity and Bitcoin continuing to establish itself in institutional portfolios, Strategy appears poised to maintain its current Bitcoin acquisition strategy of buying instead of mining for the foreseeable future. The company’s ability to access capital markets at scale gives it a unique advantage in accumulating Bitcoin during various market conditions.
As Bitcoin’s role in corporate treasury management continues to evolve and institutional adoption grows, Strategy’s bold experiment will serve as an important case study for other companies considering similar strategies. Whether this approach ultimately proves prescient or problematic will likely depend on Bitcoin’s long-term price trajectory and the company’s ability to manage the complexities of operating as a leveraged vehicle for cryptocurrency exposure.
For now, Strategy remains committed to its vision of Bitcoin as the superior treasury reserve asset, and its latest acquisition demonstrates that commitment remains unwavering even as its stock price faces near-term pressure.
