Strategy just sold 2.7 million shares of MSTR and used 90% of the proceeds to pad cash reserves, not buy bitcoin. That's a sharp departure from Michael Saylor's usual playbook.
The Numbers That Matter
Last week, Strategy raised $335.5 million through a common stock offering. Out of that, only $34.9 million went to acquire 520 bitcoin at an average price of $67,068 each. The remaining $300 million was added to the company's cash pile, bringing total cash reserves to $1.4 billion. Total bitcoin holdings now sit at 847,363 BTC, acquired at an average cost of $75,651 per coin - meaning the entire treasury is underwater at current bitcoin prices around $65,000.
The stock sale itself was sizable: roughly 2.7 million shares of MSTR were issued. That's dilution, and shareholders are absorbing it for a strategy that looks increasingly defensive.
Why Cash Beats Bitcoin This Time
For years, Saylor preached maximal leverage into bitcoin. The shift to building cash is a direct response to the meltdown in the company's preferred stock, STRC. Last Thursday, STRC hit a record low below $83 - far below its $100 par value - driven by panic over the sustainability of its dividend payments. Raising $300 million in cash is meant to backstop those dividends and reassure investors that Strategy can meet its obligations.
STRC has bounced 2% to $90.43 since the panic, but that's still a $10 gap to par. MSTR common stock is up 3.5% on the news, tracking bitcoin's own bounce to $65,000. The market is giving Saylor a tentative pass, but the fundamental question remains: if you have to sell common stock to fund preferred dividends, how long can the pyramid hold?
Strategy's next move will tell us whether this cash raise is a one-off patch or the beginning of a broader deleveraging. If bitcoin doesn't recover to the $75,000+ average cost soon, the arithmetic gets ugly.
Source: Strategy added $35 million in bitcoin, $300 million in cash reserves last week
Domain: coindesk.com
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