Michael Saylor’s Strategy Faces Bitcoin Price Challenges
- Bitcoin recently dipped to around $75,500, below Strategy’s average purchase cost of approximately $76,037 per coin.
- Strategy currently holds a total of 712,647 bitcoin, all unencumbered and not pledged as collateral.
- The company’s convertible debt amounts to $8.3 billion, with the first maturity not due until Q4 of 2027.
- Historically, Strategy has funded its bitcoin purchases through at-the-market (ATM) offerings when shares trade at a premium to net asset value (mNAV).
- As of last Friday, the mNAV was about 1.15x, but has since flipped to a discount as bitcoin prices fell.
While trading below its cost basis is not an immediate crisis for Strategy, it limits their ability to grow their bitcoin holdings without diluting shareholders. The company added only about 10,000 bitcoin during similar market conditions in the past.
If bitcoin prices remain low or decline further, it may negatively impact share performance when markets open on Monday.(Source)
