MicroStrategy Buys $250M in Bitcoin, Calling the Crypto ‘Superior to Cash’

[avp2306]

They didn't
If they did things wouldn't have gone this far that they have to sell Bitcoin to satisfy their creditors and preference shareholders.
The common stockholders have suffered alot from their dilution through ATM
Even when MSTR wasn't really trading at premium despite their EV showing otherwise.

It's just like that. It's a problem I run into a lot. Now that the topic of strategy has become trendy, you can find several threads besides this one on the subject, where people come in and spout off a long rant that, at first glance, makes some sense, but if you know the subject, you realize that the person who wrote it lacks basic knowledge.

I just laugh it off now.

This is exactly their issue now. There are people came and still have confidence on Strategy action done, but if they look closely on their current situation. They can figure out that there's missing fundamentals. Their obligations, preferred payouts and dilution is not really so mysterious or surprising with them. They experiencing problems now its because they stretch their company so much and at the end their less option to do is to sell some Bitcoins to make their company survive.

Market exposed the real situation happening to them. Well those actions they made maybe looks convincing, but if they provably see the real issue if they have an idea about those actions they have done.

[boumalo]

If BTC does well, Strategy will probably do well

[Gragebox]

This is exactly their issue now. There are people came and still have confidence on Strategy action done, but if they look closely on their current situation. They can figure out that there's missing fundamentals. Their obligations, preferred payouts and dilution is not really so mysterious or surprising with them. They experiencing problems now its because they stretch their company so much and at the end their less option to do is to sell some Bitcoins to make their company survive.

Despite the company’s extensive history of accumulation of Bitcoin and the confidence of its investors in this asset, pure confidence will not do as there have to be sound financial foundations. As soon as the corporation continues to expand its liabilities by borrowing, issuing preferred shares and diluting stocks, the company comes to the stage when it simply loses the ability to operate financially flexibly. In case the market turns out to be unfavorable for Strategy or cash flow decreases, the corporation may be forced to sell off some of its Bitcoin. However, it does not necessarily mean that the strategy of Bitcoin utilization has proved to be wrong but serves as another illustration of the risks involved in the use of leverage.

Market exposed the real situation happening to them. Well those actions they made maybe looks convincing, but if they provably see the real issue if they have an idea about those actions they have done.

Market speaks the final word of truth. Regardless of the apparent success of the project based on their initial actions, market will reveal the truth about the project. It is true that marketing and some other strategies can help in covering up problems temporarily, but such things are not possible in the long run with pressure from the market.

A reality check is the most important thing for the creators or members of the project in case they have been listening to what market has been saying all along. They need to see the truth behind their failed projects in the past and take action in finding out their root cause.

[nikola22]

Bitcoin treasury company Strategy sold approximately $263.5 million worth of MSTR shares last week. The firm said it sold 2 732 318 MSTR shares between July 13 and July 19, buy did not buy or sell and bitcoin during the period. Proceeds from the MSTR sales were used to boost Strategy's USD reserve by $225 million to $3.225 billion as of July 19.

https://www.sec.gov/Archives/edgar/data/1050446/000119312526308369/mstr-20260720.htm



https://x.com/saylor/status/2079175086142042387

Strategy has therefore retained its bitcoin holdings at 843 775 BTC worth around $54.7 billion bought at an average price of $75 476 per bitcoin

[Free Market Capitalist]

Bitcoin treasury company Strategy sold approximately $263.5 million worth of MSTR shares last week. The firm said it sold 2 732 318 MSTR shares between July 13 and July 19, buy did not buy or sell and bitcoin during the period. Proceeds from the MSTR sales were used to boost Strategy's USD reserve by $225 million to $3.225 billion as of July 19.

Instead of parroting what Saylor says I'll give you my version. Strategy continues to dilute shareholders, with a real mNAV below 1, which means it would make mathematical sense to sell bitcoin to repurchase shares—the opposite of what it is currently doing.

The thing is, given the current situation, none of the options are good—including this one: continuing to dilute shareholders to buy that fiat trash that’s losing value due to currency debasement, which Saylor has criticized so many times.

The issue is that there’s a conflict of interest between the interests of STRC holders and those of MSTR holders. MSTR holders want to avoid dilution, while STRC holders want to see the reserve increase to ensure dividend payments for many months to come. For now, it seems that Saylor is banking everything on the idea that, by increasing the reserve, STRC’s price will return to the $100 range and he’ll be able to buy back Bitcoin, but that remains to be seen. Plus, since he’s changed his mind so many times, you never know if next week he might come up with a new “strategy” that he’ll pitch as brilliant.

[nikola22]

Instead of parroting what Saylor says I'll give you my version. Strategy continues to dilute shareholders, with a real mNAV below 1, which means it would make mathematical sense to sell bitcoin to repurchase shares—the opposite of what it is currently doing.

The thing is, given the current situation, none of the options are good—including this one: continuing to dilute shareholders to buy that fiat trash that’s losing value due to currency debasement, which Saylor has criticized so many times.

The issue is that there’s a conflict of interest between the interests of STRC holders and those of MSTR holders. MSTR holders want to avoid dilution, while STRC holders want to see the reserve increase to ensure dividend payments for many months to come. For now, it seems that Saylor is banking everything on the idea that, by increasing the reserve, STRC’s price will return to the $100 range and he’ll be able to buy back Bitcoin, but that remains to be seen. Plus, since he’s changed his mind so many times, you never know if next week he might come up with a new “strategy” that he’ll pitch as brilliant.

as for Saylor's actions, we can only guess what he's counting on. it seems to me that he wants to wait out the bear market and high Fed rates and for that he needs cash. also Trump probably throw a spanner in the works, first with his tariff wars and then with the actual war with Iran. he previously said that Bitcoin's four-year cycle had already been broken and that things would develop differently now. perhaps, without Trump's actions the Bitcoin price wouldn't have halved from the ATH and could be around $80 000-$90 000. he's not in the best position but I hope things don't reach zugzwang.

let's consider the point of buying MSTR shares. we know they don't pay dividends. as far as I remember, they're positioned as indirect access to Bitcoin. but what's the point of such access if you can buy Bitcoin itself or Bitcoin ETF shares? don't you think investors are simply chasing predictions that if Bitcoin rises, MSTR shares will generate even greater profits? in that case, they should accept all the risks. for example, some altcoin holders bought tokens at prices that have now fallen by 5-10 times or even more. the same thing happened with MSTR shares; the price has fallen by about 5 times from its ATH. in my opinion, if you want more profit, you have to take more risks.

as for the STRC holders, they're probably in the most advantageous position because they have USD reserves and Strategy has plenty of Bitcoin reserves. at worst, they'll get their money back because Strategy is highly likely to continue operating 1-2 years.

[Gragebox]

Instead of parroting what Saylor says I'll give you my version. Strategy continues to dilute shareholders, with a real mNAV below 1, which means it would make mathematical sense to sell bitcoin to repurchase shares—the opposite of what it is currently doing.

The thing is, given the current situation, none of the options are good—including this one: continuing to dilute shareholders to buy that fiat trash that’s losing value due to currency debasement, which Saylor has criticized so many times.

I found your criticism refreshing because of the change in tone. What you are describing is an enormous contradiction in the game plan used by MicroStrategy. If the mNAV gets lower than 1, then by their math, it makes sense for them to sell their Bitcoin and repurchase underpriced shares. But doing exactly the opposite of this violates any common-sense corporation finance principles.

Instead, they continue to dilute the equity in order to pile up more Bitcoin. This irony is rich since using extensive equity dilution in order to avoid "fiat trash" and currency devaluation is exactly what Saylor would criticize. It seems that they got caught in a vicious circle and are trapped in a situation where there is no perfect solution.

The issue is that there’s a conflict of interest between the interests of STRC holders and those of MSTR holders. MSTR holders want to avoid dilution, while STRC holders want to see the reserve increase to ensure dividend payments for many months to come. For now, it seems that Saylor is banking everything on the idea that, by increasing the reserve, STRC’s price will return to the $100 range and he’ll be able to buy back Bitcoin, but that remains to be seen. Plus, since he’s changed his mind so many times, you never know if next week he might come up with a new “strategy” that he’ll pitch as brilliant.

The balancing act between the interests of STRC and MSTR stockholders may prove to be difficult since something that favors one party might hurt the other party. Increasing the size of the reserves would help enhance STRC's capability to pay dividends, although such increase could mean losing their value through dilution. All of it rests on how well Saylor is able to pull off his scheme and revive the stock price of STRC. Considering the many times his scheme changed, investors need to watch out and evaluate his moves through his actions.

as for Saylor's actions, we can only guess what he's counting on. it seems to me that he wants to wait out the bear market and high Fed rates and for that he needs cash. also Trump probably throw a spanner in the works, first with his tariff wars and then with the actual war with Iran. he previously said that Bitcoin's four-year cycle had already been broken and that things would develop differently now. perhaps, without Trump's actions the Bitcoin price wouldn't have halved from the ATH and could be around $80 000-$90 000. he's not in the best position but I hope things don't reach zugzwang.

In your considerations, you take the bigger perspective into account, which is reasonable. Predicting any steps of Saylor is not an easy task, but indeed, it seems that he plays a high-risk waiting game. Enduring a harsh bear market in combination with high interest rates set by the Fed requires a very substantial amount of cash reserves, which clearly indicates the necessity to find liquidity sources.

Moreover, the macroeconomic environment has changed completely. Political instabilities caused by such issues as tariffs and increased geopolitical risks associated with, for example, confrontation with Iran create serious problems for the whole cryptocurrency sector. It is quite clear that if there were no such huge external shocks, the Bitcoin would not face such an intense halving in its all-time peak and would remain in the range of $80,000-$90,000.

The theory of Saylor concerning a broken four-year cycle is put to test. He remains in a difficult situation, and, as you, I can only hope that he will not get himself into the zugzwang.

[JayJuanGee]

A reality check is the most important thing for the creators or members of the project in case they have been listening to what market has been saying all along. They need to see the truth behind their failed projects in the past and take action in finding out their root cause.

You seem to be just making shit up, and acting like you know more than you know, since it seems unlikely that MSTR/Saylor could be characterized as a "failed" project, even though Saylor/MSTR had likely been overselling, exaggerating and even making some pretty dumb cashflow management choices that included the ways that they decided to balancing of some of their various debts versus financial instruments versus stocks.

Bitcoin treasury company Strategy sold approximately $263.5 million worth of MSTR shares last week. The firm said it sold 2 732 318 MSTR shares between July 13 and July 19, buy did not buy or sell and bitcoin during the period. Proceeds from the MSTR sales were used to boost Strategy's USD reserve by $225 million to $3.225 billion as of July 19.

Instead of parroting what Saylor says I'll give you my version. Strategy continues to dilute shareholders, with a real mNAV below 1, which means it would make mathematical sense to sell bitcoin to repurchase shares—the opposite of what it is currently doing.

The thing is, given the current situation, none of the options are good—including this one: continuing to dilute shareholders to buy that fiat trash that’s losing value due to currency debasement, which Saylor has criticized so many times.

The issue is that there’s a conflict of interest between the interests of STRC holders and those of MSTR holders. MSTR holders want to avoid dilution, while STRC holders want to see the reserve increase to ensure dividend payments for many months to come. For now, it seems that Saylor is banking everything on the idea that, by increasing the reserve, STRC’s price will return to the $100 range and he’ll be able to buy back Bitcoin, but that remains to be seen. Plus, since he’s changed his mind so many times, you never know if next week he might come up with a new “strategy” that he’ll pitch as brilliant.

Many of us have probably been guilty of parroting Saylor too much, even though in more recent times, Saylor and MSTR has been being shown to be more manipulative and contradictory, so it becomes problematic for guys to parrot him and not to employ at least some minimal amounts of critical application of what he is saying in contrast to what he had been saying previously.

There probably not too many of us who thought that ongoing and incessant buying of bitcoin was a great idea  when the BTC price was shooting up, even though there is some practicality to keep buying while they money was coming availalble for the purpose of buying bitcoin.

So yeah, there is also quite a bit of contradiction to be building up cash reserves during periods that he should be buying and then having had failed/refused  to sufficiently build up cash reserves during periods that he should have had been, such as when the BTC price was over $110k.

At the same time, strategies can cut both ways and sometimes we don't really see the contradiction of various prior strategies until some time has passed and allowed us to see how ridiculous some of the previous strategies seemed to have had been.

Although, I am not even in any kind of a position to engage in great criticism, since some of the hype creation and marketing tactics do result in dollars getting raised, which surely individual buyers are not in a position to be needing to create hype in their own products since we are not relying on the use of other people's money to buy our bitcoin.

I have frequently been of the opinion that creating and maintaining some kind of an outline about how much money is already on hand for buying bitcoin as the prices go down (if they go down) and/or for servicing any debt obligations or the servicing of STRC with the payment of dividends or yields, and from my opinion, it becomes harder to hunt for his points of selling bitcoin, if he already had outlined a plan for buying all the way down while still being able to service the dividends.

Saylor/MSTR had always proclaimed that they did not want to keep that much cash on hand, but it seems when the price is going down, then it comes in handy to have cash on hand to keep buying on the way down, yet of course, if they run out of cash to continue to buy, perhaps if the price were to go below $20k, then they would just hold through it, while still having money to pay the dividends.

But, yeah, of course, I don't want to claim to know exactly how to handle these matters, even though my own personal philosophy has been to buy on the way down and sell on the way up, and I understand the idea of not wanting to sell very much on the way up, yet it seems a great idea to buy on the way down even when the amount of money coming available to continue to buy might start to dry up and if that amount completely dries up because the price keeps going down and the person (or entity) had run out of money, then that would mean HODL and not to sell, so there wouldn't be any expectations of selling.. at least that seems to be the basics of long term investing and a willingness to ride it down to zero (even though easier said than done ).

[Free Market Capitalist]

You seem to be just making shit up, and acting like you know more than you know, since it seems unlikely that MSTR/Saylor could be characterized as a "failed" project, even though Saylor/MSTR had likely been overselling, exaggerating and even making some pretty dumb cashflow management choices that included the ways that they decided to balancing of some of their various debts versus financial instruments versus stocks.

Yeah, I don't even see it as possible in the short or medium term that the project would fail, which would mean bankruptcy. I do think it's more likely to happen with other Bitcoin treasury companies—smaller ones with lower margins and a higher average purchase price. But it is possible that Strategy and its products could go out of style and remain stagnant or “meh” for a long time.

Many of us have probably been guilty of parroting Saylor too much,

I did the same in the past too.

even though in more recent times, Saylor and MSTR has been being shown to be more manipulative and contradictory, so it becomes problematic for guys to parrot him and not to employ at least some minimal amounts of critical application of what he is saying in contrast to what he had been saying previously.

That's the point, there is much widespread criticism as to simply repeat what he says without question.

So yeah, there is also quite a bit of contradiction to be building up cash reserves during periods that he should be buying and then having had failed/refused  to sufficiently build up cash reserves during periods that he should have had been, such as when the BTC price was over $110k.

I agree.

Saylor/MSTR had always proclaimed that they did not want to keep that much cash on hand, but it seems when the price is going down, then it comes in handy to have cash on hand to keep buying on the way down,

And he did the opposite, low to no cash when the price skyrocketed, then when it went down, he realized the need of a cash stash.

But, yeah, of course, I don't want to claim to know exactly how to handle these matters, even though my own personal philosophy has been to buy on the way down and sell on the way up,

That's a rational philosophy, not just personal for you. No way are you the only one who thinks that (I think the same too).

[fillippone]

The issue is that there’s a conflict of interest between the interests of STRC holders and those of MSTR holders. MSTR holders want to avoid dilution, while STRC holders want to see the reserve increase to ensure dividend payments for many months to come.

In a way, the situation is even more complicated than that: there is a third category of stakeholders: the hybrid instruments holders, who have a slightly different agenda than general holders.
But yeah, the point is correct: satisfing everyone, and pleasing also the fourth group , the bitcoin maximalists, has proven an impossible feat.
But I think that from now, with the Phong Le takeover, the approach will be a little bit more practical and sensible.

[Ambatman]

Strategy continues to dilute shareholders, with a real mNAV below 1, which means it would make mathematical sense to sell bitcoin to repurchase shares—the opposite of what it is currently doing.

I still can't comprehend why he did this when he relies on a metric of Using EV
Which he should know is a scam and by the way it's even at 1.00.
While Real is way lower.

it seems that Saylor is banking everything on the idea that, by increasing the reserve, STRC’s price will return to the $100 range and he’ll be able to buy back Bitcoin

I love asking myself questions like would I do it?
Would I buy more STRC even as a previous owner as reserve rises? No I wouldn't.
Nothing its stopping them from buying back convertible debts.

If I'm not mistaken their minimum policy on cash reserve is 12 months and they have enough to go almost 2 years
With a debt obligation currently below $2B.

But yeah, the point is correct: satisfing everyone, and pleasing also the fourth group , the bitcoin maximalists, has proven an impossible feat.
But I think that from now, with the Phong Le takeover, the approach will be a little bit more practical and sensible.

I believe their priority as a business should be on their investors.
Like I usually say even the US had to sell some Gold to scale through a toughy period.

[Alex077]

Bitcoin treasury company Strategy sold approximately $263.5 million worth of MSTR shares last week...

.. Strategy continues to dilute shareholders, with a real mNAV below 1, which means it would make mathematical sense to sell bitcoin to repurchase shares—the opposite of what it is currently doing.
The thing is, given the current situation, none of the options are good—including this one: continuing to dilute shareholders to buy that fiat trash that’s losing value due to currency debasement, which Saylor has criticized so many times.

The issue is that there’s a conflict of interest between the interests of STRC holders and those of MSTR holders. MSTR holders want to avoid dilution, while STRC holders want to see the reserve increase to ensure dividend payments for many months to come...

Well, in this particular case, I completely agree with you about the share sales. I also really don’t understand Saylor’s logic behind the last two MSTR offerings. They automatically dilute existing shareholders and clearly damage the company’s reputation.

In this situation, I agree that selling some Bitcoin would probably have made more sense, especially since Strategy didn’t buy any BTC during the week and simply increased its dollar reserves. That means the amount of Bitcoin per share didn’t improve either.

In the end, shareholders got diluted, but there was no improvement in Bitcoin per share to offset it. That's exactly why so many investors weren't happy with the move.
Markets generally don’t like dilution, especially when a company has spent years saying that issuing shares below intrinsic value is bad for shareholders.

It seems to me that Saylor is now trying to balance between two extremes: selling as little Bitcoin as possible so he doesn’t add more pressure to the crypto market, while at the same time building up enough cash to cover STRC dividend payments and support the value of those shares.
For now, Saylor seems to be following exactly the approach JPMorgan analysts  recommended. Their words were:

“The possibility of Strategy selling Bitcoin creates a two-sided risk for crypto markets, adding more uncertainty and price volatility to Bitcoin. That could be avoided if the company issued shares instead to build reserves for future dividend payments.”

But at the same time, we shouldn’t forget that JPMorgan reportedly has a large short position in Strategy shares, while dilution itself puts additional pressure on the stock price.

[Popkon6]

Today marks $STRC’s one-year anniversary. Some stats:

1. $STRC has raised ~$10.15 billion.

2. Since IPO, $STRC has closed below par 9 times.

3. The longest recovery period back to par was 69 trading days, which was the IPO phase itself.

4. The shortest recovery period back to par was 1 trading day.

5. The average recovery period back to par is 9.8 trading days.

6. The current recovery period is 44 trading days and counting, making it the longest recovery since IPO.

7. The lowest closing price was $74.57.




Source link: https://x.com/i/status/2079536874368974960

STRC ATM one-year anniversary is over tomorrow, but STRC has managed to generate $10.15 billion in revenue in a year. It has achieved success in a very short period of time and the value of this stock is very good, which is why it will perform even better in the future.

[Free Market Capitalist]

STRC ATM one-year anniversary is over tomorrow, but STRC has managed to generate $10.15 billion in revenue in a year. It has achieved success in a very short period of time and the value of this stock is very good, which is why it will perform even better in the future.

I'm going to disagree here. You could say the same thing about “success” when it comes to shitcoins that skyrocket at first, but end up at zero. With STRC, Saylor has sought to create a kind of stablecoin—a product from which he has supposedly “stripped the volatility” of Bitcoin, something he’s been failing at quite a bit lately.

And if we look at it closely, that volatility is only capped on the upside, because when the stock reaches $100, Strategy starts selling and suppresses the price from rising further. But there is no lower limit to the volatility. In less than a year of trading, it has fallen as low as $74.57. 25% down for an alleged kind-of-stablecoin is not stable at all.