Strategy's Persistent Bitcoin Acquisition: Funding Through Equity Sales

Strategy US5949724083

Despite holding a substantial Bitcoin portfolio currently valued below its average purchase price, the corporate intelligence firm Strategy continues to double down on its digital asset strategy. A recent regulatory filing has revealed another significant purchase, financed through the sale of company shares. This raises questions about the sustainability of using equity markets to fund ongoing cryptocurrency acquisitions.

According to a Form 8-K filing submitted yesterday, Strategy purchased an additional 2,486 Bitcoin during the week of February 9th to 16th. The total cost for this acquisition was $168.4 million, resulting in an average price of $67,710 per Bitcoin when fees and associated costs are included.

The purchase was funded entirely through the company's ongoing "at-the-market" (ATM) equity offering program. This mechanism involves the periodic sale of Strategy's various share classes on the open market, with the proceeds directed toward expanding its Bitcoin treasury. The recent capital raise consisted of two components:
* MSTR Common Stock: 660,000 shares sold for net proceeds of $90.5 million.
* STRC Preferred Stock: 785,354 shares sold for net proceeds of $78.4 million.

The combined proceeds of approximately $169 million nearly covered the entire cost of the latest Bitcoin investment.

Portfolio Standing and Unrealized Loss

As of February 16th, Strategy's total Bitcoin holdings amount to 717,131 coins. The aggregate acquisition cost for this vast portfolio stands at $54.52 billion, translating to an average cost basis of $76,027 per Bitcoin.

With Bitcoin trading around $68,000, the current market price sits roughly $8,000 below the company's average entry point. Across the entire holding, this represents an unrealized loss of approximately $5.7 billion.

Share Price Dynamics and Future Funding Capacity

Market reaction to the filing was negative, with CoinDesk reporting a 3.2% decline in Strategy's share price in pre-market trading on the announcement day. Year-to-date, the stock has fallen more than 60%. However, the stock's high correlation to Bitcoin's price was recently demonstrated; in early February, shares surged 25% as Bitcoin briefly reclaimed the $70,000 level.

Strategy retains significant capacity to raise further capital through its established programs. According to company disclosures, the remaining availability under its ATM programs is substantial:
* STRK: $20.3 billion
* MSTR: $7.9 billion
* STRD: $4.0 billion
* STRC: $3.5 billion
* STRF: $1.6 billion

The company also highlights its public disclosure dashboard, maintained in accordance with Regulation FD, which provides ongoing updates on its holdings, security data, and key metrics.