Investors have delivered a sharp rebuke to software conglomerate Strategy after its most recent acquisition of Bitcoin, sending the company’s stock to a five-month low. The negative market reaction stems from the method of financing: the $100 million purchase was funded by issuing new shares, a move many existing shareholders view as dilutive to their holdings.
Between September 15th and 21st, the company added 850 Bitcoins to its treasury at an average price of $117,344 per coin. This latest buying spree was financed through the sale of 227,401 common shares, which raised $80.6 million, supplemented by an additional $19.4 million from the issuance of preferred stock. This established pattern of raising capital through equity sales to fund digital asset acquisitions is increasingly drawing criticism from the market.
Should investors sell immediately? Or is it worth buying Strategy?
A Multi-Billion Dollar Bitcoin Treasury Expands
With this purchase, Strategy’s corporate treasury now holds a staggering 639,835 Bitcoins, a reserve valued in the billions of dollars and one of the largest corporate holdings globally. Despite the scale of its investment, Strategy’s share price performance has recently diverged significantly from that of Bitcoin itself. While Bitcoin retreated only 8% from its recent peaks in recent weeks, Strategy’s equity experienced a substantially steeper decline, highlighting investor apprehension about the repeated capital increases.
Executive Chairman Michael Saylor remains committed to the company’s strategy. He has consistently stated that price volatility does not deter the firm, with market pullbacks being viewed as buying opportunities. However, the critical question for investors is how long they will continue to support this approach, especially considering that Strategy has the capacity to raise billions more for future Bitcoin purchases through its various equity programs.
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