Michael Saylor Strategy (formerly MicroStrategy), popular as the largest Bitcoin holder, is facing backlash after changing a major policy on MSTR stock issuance. As per the policy change, the company will issue shares even under the mNAV of 2.5x, reversing its decision from three weeks back.
Executive Chairman Michael Saylor made an announcement on August 18, which sparked outrage. Saylor also mentioned the company had adjusted its MSTR Equity ATM Guidance to create additional flexibility to take measures to implement its capital markets strategy in a corporate update. The amendment removes an earlier provision that barred Strategy Inc. (NASDAQ: MSTR) from issuing stock against below 2.5 times net asset value (mNAV).
That pillar, which was traditionally used to provide protection to the investors, was intended to restrain the dilution of the shareholders, as mentioned in our earlier story. Its withdrawal has led to severe attacks by traders and analysts who feel the company is going to default on what it had promised earlier.
Jacob King, chief executive of WhaleWire and financial analyst, posted his disdain in X: “Saylor pulled the rug. I’ve been warning people for months that he is a sleezy, corrupt fraud. He lied to investors and promised $MSTR wouldn’t issue stock below 2.5x mNAV.”
King explained the shift by the actual reduction of the premium offered by MicroStrategy, which declined according to him between 3.4x to 1.6x since November 2024. “This means he can now dilute shareholders anytime it benefits him. This was never about Bitcoin; it’s about Saylor cashing in,” King added.
Other stockholders also voiced their objections, stating that the company had not just assured investors on its recent earnings call, but that it would sell no shares below the limit. Investor Simecka commented, “Not happy about this. This isn’t what was communicated 2 weeks ago on the earnings call.”
The pushback spotlights investor unease with MicroStrategy’s governance and its willingness to alter long-standing policies. According to critics, the ruling just gives the MicroStrategy management a free power to sell equity.
Commentator based16z stated that the turn of events was disconcerting when he said, “He’s folding. This may be better since the old announcement guaranteed death. Also, switching up doesn’t inspire confidence.”
Market analysts have also voiced their opinion on the matter. Daan Crypto Trades opined that the revision keeps the so-called ‘Saylor bid’ circulating, in terms of the company can once again opportunistically issue stock to make Bitcoin purchases.
The perceived threat of flexibility is that it would increase the vulnerability of the company when it comes to Bitcoin swings. One investor commenting online noted that the new strategy can be expected to lead to problems by potentially “diluting shareholder value, eroding investor confidence, putting downward pressure on the stock price, and increasing financial risk due to dependency on Bitcoin’s volatility.”
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