Saylor's Purchase of 1550 Bitcoin Is a Bad Trade
**Title: Saylor's Purchase of 1,550 Bitcoins Was a Bad Trade**
The article critically analyzes Strategy's recent move of selling 32 bitcoins followed by a much larger purchase of 1,550 bitcoins. While appearing bullish, the author argues this trade is detrimental to MSTR shareholders.
The core argument revolves around the concept of "breakeven modified Net Asset Value (mNAV)," a key metric for Strategy. To increase Bitcoin per share (BPS) for MSTR holders, Strategy must issue new shares at a premium high enough that the funds raised can buy more bitcoin than the bitcoin backing each existing share. Currently, this breakeven mNAV is estimated at 1.30.
The recent trade failed on two counts:
1. The shares for the $181 million raise were issued at an mNAV *below* the 1.30 breakeven point. Selling "cheap" shares to buy bitcoin actually *reduces* BPS.
2. Only $101.3 million of the raised funds were used to buy bitcoin; the rest went to boost the company's dollar reserves. The breakeven mNAV calculation assumes *100%* of proceeds are used for bitcoin purchases. Diverting funds, even if mNAV were high, dilutes BPS.
The result is an estimated 0.19% decrease in Bitcoin per share for MSTR holders. In exchange, Strategy merely extended its operational runway for its dollar reserves from ~6.3 months to 7 months.
The author interprets this as Strategy prioritizing the survival and development of its STRC business over its stated core goal of increasing MSTR's BPS. This constitutes a gamble: if sacrificing MSTR value leads to improved market sentiment and a recovery in STRC's price (and thus mNAV), the whole system could work. If not, Strategy may be forced into a cycle of further diluting MSTR to stay afloat, potentially leading to deferred STRC dividends or corporate decline. The article concludes with a hope for price recovery for Bitcoin, MSTR, and STRC.
Foresight News06/09 07:57
