MicroStrategy disclosed its newest Bitcoin buy on January 26. In its 4th buy of the month, the corporate acquired $264.1 million in Bitcoin at a mean value of $90,061 per BTC.
The acquisition brings the corporate’s common price of Bitcoin buy to $76,037. The acquisition got here as Bitcoin traded in a risky January vary, slipping from early-month highs above $95,000 to the high-$80,000 vary.
Whereas the headline purchase reinforces MicroStrategy’s long-term Bitcoin conviction, underlying information suggests the corporate’s funding mannequin is going through mounting structural stress.
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MicroStrategy funded the January 20–25 buy window primarily via fairness issuance.
The corporate bought 1,569,770 shares of widespread inventory, producing $257.0 million in web proceeds, alongside 70,201 shares of STRC most well-liked inventory, which raised a further $7.0 million.
Whole proceeds of $264.0 million intently match the reported Bitcoin buy price.
In easy phrases, Technique paid for the acquisition by promoting new shares, not through the use of enterprise earnings or money readily available.
Many of the cash got here from issuing widespread inventory, with a smaller portion raised via most well-liked shares.
Collectively, these gross sales absolutely lined the price of the Bitcoin buy. So, the corporate continues to depend on capital markets to fund its accumulation technique.
mNAV Has Slipped Into Low cost Territory
MicroStrategy’s most crucial structural metric is its a number of to web asset worth (mNAV), which measures how its fairness trades relative to the worth of its Bitcoin holdings per share.
As of January 26, MicroStrategy’s diluted mNAV stands at roughly 0.94x, which means the inventory trades at a 6% low cost to the Bitcoin backing every share.
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This issues as a result of MicroStrategy’s technique will depend on issuing shares above web asset worth. When shares commerce at a reduction, new issuance dangers destroying, relatively than creating, shareholder worth.
Accretive Issuance Is Approaching Zero
Traditionally, MicroStrategy justified fairness issuance by rising Bitcoin per diluted share. That accretion is now fading.
Primarily based on company-reported information:
- On January 5, MicroStrategy held 673,783 BTC with 345.6 million diluted shares, or 0.001949 BTC per share.
- By January 26, holdings rose to 712,647 BTC, however diluted shares climbed to 364.2 million, leading to 0.001957 BTC per share.
That represents solely a 0.38% enhance over the month.
Extra importantly, between January 20 and January 26, the quantity of Bitcoin backing every share barely modified.
This reveals that latest share issuance is not rising Bitcoin publicity for shareholders in a significant means
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Bitcoin Per Diluted Share Over Time
Rising Dilution Is No Longer Offset by BTC Development
Dilution is accelerating. From January 5 to January 26:
- Diluted share rely rose by 5.36%.
- Bitcoin holdings elevated by 5.77%.
Whereas holdings nonetheless marginally outpaced dilution over the total month, the hole narrowed sharply in the newest week. This erosion aligns with the autumn in mNAV and suggests the mannequin is shedding effectivity.
If the inventory stays beneath web asset worth, additional fairness issuance would mathematically cut back Bitcoin publicity per share.
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Capital Market Dependence Is Rising, Not Falling
Technique’s Bitcoin strategy stays fully depending on entry to capital markets.
Over the previous 19 months, the corporate has raised an estimated $18.56 billion via widespread fairness issuance, issuing roughly 226.6 million shares. The most recent buy continues that development, including additional dilution at a time when market circumstances have weakened.
The corporate additionally more and more depends on most well-liked inventory, which introduces mounted claims senior to widespread shareholders.
Whereas most well-liked issuance can maintain Bitcoin shopping for throughout fairness weak point, it raises long-term obligations and will increase stability sheet complexity.
What This Means for Buyers
MicroStrategy’s newest Bitcoin buy will not be problematic due to its dimension or timing. The priority lies in construction, not conviction.
With mNAV now beneath 1.0x, Bitcoin-per-share accretion nearing zero, dilution accelerating, and reliance on capital markets deepening, the corporate’s core technique faces tighter constraints than at any level in recent times.
Until fairness premiums return, continued Bitcoin accumulation dangers shifting from accretive to dilutive.
That transition would basically change the chance profile for shareholders, even when Bitcoin costs recuperate.
For now, the information reveals that MicroStrategy can nonetheless purchase Bitcoin. The open query is whether or not it may possibly preserve doing so with out eroding shareholder worth.