Source: Fortune
Summary
Michael Saylor, Executive Chairman of Strategy (formerly MicroStrategy), has implemented an unconventional strategy of constantly increasing the company’s Bitcoin holdings by issuing new shares. Despite a 4.13x increase in shares since Q2 2020, the company’s stock price has fallen 72% since its peak in 2025, while Bitcoin’s price has dropped 51%. To maintain the Bitcoin per share (BPS) ratio, Saylor has shifted to issuing preferred stock, collecting $7 billion in offerings, but this has led to a large debt pile and high dividend payments. The company’s future plans to “equitize” its borrowings by issuing more shares may undermine its goal of increasing BPS.
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The strategy enters a familiar phase.
Saylor’s “accretion machine” relies on selling shares to buy Bitcoin, but the math no longer works. The company’s stock price has fallen faster than Bitcoin’s, making it harder to maintain the BPS ratio. The shift to preferred stock has enabled Saylor to keep BPS constant, but at a high cost. The company’s debt load and dividend payments render it a risky investment. Saylor’s goal of increasing BPS may be undermined by his own financing strategy.
As the stock price continues to fall, Saylor’s investors are paying the price for his expensive financing strategy.
Author: Evan Null
