Key Takeaways
How much Bitcoin did Strategy buy and at what price?
196 BTC at $113,048 per coin, pushing treasury to 640,031 BTC worth $70 billion.
How did MSTR stock react after the purchase?
MSTR rose 5.62% as BTC gained 2%, but dilution concerns pressured the shareholder value outlook.
MicroStrategy, now Strategy Inc. (MSTR), rose by 5.62% in the last 24 hours after announcing it had acquired more Bitcoin [BTC].
The firm acquired 196 BTC worth $22.1 million at $113,048 per coin, bringing its treasury to 640,031 BTC valued at over $70 billion. Strategy still carries about $8 billion in debt.
The Bitcoin-first pivot launched by Michael Saylor in 2020 remained profitable. Even so, the company’s capital-raising methods faced scrutiny.
Impact of rising dilution risk on shareholders
After acquiring more than $22 million in BTC, Strategy also diluted shareholders by over $128 million, which was mostly in MSTR commons. Additionally, Saylor sold shares of preferreds to pay them their dividends.
This dilution reduced existing ownership percentages and weighed on individual share value. Proposed expansion of the program could lift total dilution risk to $10.3 billion.
Source: X
On a positive note, this dilution of MSTR shares gave them more options for raising capital instead of relying on debt. It was also viewed as a strategic intent, as it would increase BTC per share value over time.
Bitcoin and MicroStrategy stock correlation
Bitcoin and MicroStrategy stock prices have been closely related. Acquisition of BTC and a move higher in the price of Bitcoin usually result in the price of MSTR rising.
In fact, after the 196 BTC purchase, the stock price rose by $17.36 at the end, as per Yahoo Finance data. Also, BTC rose by 2%, adding to the value of the stock.
Source: Cas Abbe/X
Chart signals also showed a bullish divergence near $115,000 resistance, supported by RSI bouncing from oversold territory. That move aligned with optimism around Saylor’s steady accumulation.
In the near term, BTC and MSTR could continue to move in tandem as the treasury expands.
Community reactions and conclusion
The reactions have been mixed, with some echoing Strategy’s dilution of its stock.
For MSTR holders, it was not all good. A CT user noted that the buy was small due to the fall in MSTR price last week.
In a post, the user named Foss Invest wrote,
“A small buy because he can’t do ATM offerings when the stock price goes down 10% in a week. As BTC falls his ability to do ATM offerings will tighten!”
On the other hand, another user, Martin Fine, was in full support of this. He argued that to build such a treasury by Strategy would take a lot of time normally, but was possible due to BTC in only five years.
In conclusion, if MSTR stopped buying BTC, it would erode confidence in the crypto markets. Alternatively, continued acquisition of BTC would mean MSTR stock underperforms Bitcoin itself.
