Michael Saylor is already changing the funding rules he made only a few weeks ago, and this seems to be a result of the recent market ups and downs which has put his big Bitcoin plan to the test
According to a report from Bloomberg, he had initially promised to slow down selling common shares and focus instead on perpetual preferred stock. But now his company, Strategy Inc., says it will still sell shares even below the level it set before, if it helps the business.
Back in late July, Strategy said it would not sell new stock if its share price was less than 2.5 times the value of its Bitcoin holdings. The only exceptions were for paying debt interest or dividends on preferred shares.
This 2.5x margin, which Saylor calls the “mNAV premium,” has long been his way to raise money at high prices and buy more Bitcoin cheaply, giving the company an edge.
The new update changes that rule. Now the company says it can sell shares below the 2.5x level “when otherwise deemed advantageous to the company.” This gives Strategy more freedom to bring in money when needed
“I think the additional language in the guidance gives them more leeway with issuing common stock. That should allow the company to be more opportunistic in its Bitcoin purchases” Brian Dobson, managing director at Clear Street explained.
Still, the company has been buying less Bitcoin than before. It reported purchasing 430 Bitcoin for $51.4 million in the week ending August 17, after buying 155 Bitcoin in the week before that. Currently, Strategy now holds about $72 billion in Bitcoin, but its pace of buying has clearly slowed down.
At the same time, Strategy’s stock is not doing as well as Bitcoin itself. Since November 20, its shares are down 22%, even while Bitcoin is up 23% over the same time .
Short seller Jim Chanos commented on the shift in a recent post. “Not only did $MSTR buy just $51M of Bitcoin, due to lack of demand for the preferred ATM’s, but it also looks like Saylor is lowering the 2.5x mNAV floor”
However, Strategy has not made further comments. But the company’s journey has been dramatic. Since 2020, it has changed from a small software maker to the biggest Bitcoin holding companies in the world.
At its peak, its shares traded at a 200% premium to its Bitcoin value, helping it raise tens of billions of dollars. Now, with new rivals and funds competing for investors, Saylor is looking for fresh ways to keep buying Bitcoin and pushing forward his vision.
Also Read: Bitcoin Price at $115K: Support or Breakdown Ahead?
