Strategy (formerly MicroStrategy) added another $100 million in Bitcoin to its balance sheet last week, extending its buying campaign and making it the world’s largest corporate holder of the digital asset, while sharpening the debate over what ordinary shareholders actually own.
On June 15, company chairman Michael Saylor said that Strategy purchased 1,587 BTC at an average price of $63,024 per token, bringing its total holdings to 846,842 BTC.
The position represents more than 4% of Bitcoin’s fixed supply of 21 million coins, a level that has transformed Strategy from a software company to one of the hottest Bitcoin funding vehicles on the market.
But the acquisition comes at an even more difficult time for the company’s stock story. Bitcoin has fallen sharply from its recent highs, putting Strategy’s stock under further pressure, and the company’s preferred per-share metric for tracking Bitcoin ownership fell after the trade.
The decline reignited questions that Strategies has had over several rounds of capital raising. Is the company still increasing value for public shareholders, or is it asking them to accept a smaller claim on their Bitcoin stack in exchange for a larger, more complex balance sheet?
Bitcoin stack increases, BTC yield decreases
According to SEC filings, Strategy Inc. funded the acquisition through the sale of Class A common stock.
The company announced last week that it had sold 1.7 million shares of MSTR stock for approximately $209 million. The company used about $100 million to buy Bitcoin and allocated another $100 million to its dollar reserves, bringing its reserves to about $1.1 billion.
The company still has $25.75 billion in MSTR stock available for sale under the over-the-counter program. We have also expanded our capital markets platform to include up to an additional $21 billion in common stock, $21 billion in STRC preferred stock, and $2.1 billion in STRK preferred stock.
The scale of these programs has challenged how investors should measure dilution with each new transaction.
Strategy’s BTC yield tracks the change in its assumed diluted Bitcoin holdings per share, falling from 13.0% on June 1st to 12.8% on June 8th. After the latest purchase it fell again to 12.5%. This decline occurred despite Strategy’s Bitcoin holdings increasing from 843,706 BTC to 846,842 BTC during the same period.
For critics, that’s the core issue. Although Strategy bought more Bitcoin, public shareholders appear to own fewer Bitcoins per share, as measured using the company’s proprietary Bitcoin per share framework.
Matthew Clutter, a Bitcoin supporter and strategy commentator, argued that falling Bitcoin yields indicate the trade is diluting. He wrote to X:
“congratulations sailor And MSTR shareholder dilution strategy again on the weekend! Bitcoin per share has fallen again and the Saylor fools are too stupid to understand what is happening to them. ”
Thaler defends strategy against dilution argument
Saylor rejected the idea that the latest trade should be judged solely on BTC yield, arguing that while the metric captures Bitcoin per share, it does not take into account cash strategies added to the balance sheet.
His defense is based on a broader framework built around Common Equity Bitcoin Exposure (CEBE).
Under this approach, investors distinguish between Bitcoin per share before preferred claims and the Bitcoin exposure available to common shareholders after taking into account debt, preferred stock, and cash reserves.
Thaler describes BPS as a common stock growth metric, while CEBE BPS is a more conservative risk metric because it adjusts for preferred claims. In his view, BTC yield measures performance on the BPS side of the equation, but does not fully capture a company’s residual equity value.
As a strategy’s capital structure becomes more stratified, that distinction becomes more important. If the obligations are short-term or high-value, the importance of CEBE increases as those claims can quickly weigh on public shareholders.
But if the debt is older and the value of Bitcoin rises faster than the company’s cost of financing, Saylor argues that BPS better reflects the upside potential of common stock.
Considering this, he described the gap between BPS and CEBE BPS as “amplification”. Without debt or preferred stock, the two measures would be the same and the Bitcoin treasury company would track Bitcoin itself more closely. As debt increases, measures diverge, creating both the possibility of overperformance and the risk of underperformance.
For Thaler, that means Strategy’s debt should not be treated as a single risk category. Short-term, high-cost debt can inhibit leverage, while long-term, low-cost financing can increase the upside potential for common stock if Bitcoin’s annual returns exceed the company’s cost of capital.
In that framework, the latest deal could look dilutive on a Bitcoin per share basis, but still accretive if cash reserves and senior debt are included.
On this basis, Thaler argued that a well-capitalized Bitcoin treasury company could outperform Bitcoin over the long term if its assets appreciate faster than the cost of financing the structure.
Market analysts remain divided on balance sheet
Despite Thaler’s detailed defense of capital structure, institutional analysts remain deeply divided over whether the strategy is creating or destroying value.
Quinn Thompson, chief investment officer at Wrecker Capital, criticized the continued issuance of shares, arguing that Strategy should strengthen its balance sheet rather than use the new capital to buy more Bitcoin.
Mr. Thompson said MSTR’s common stock trades at approximately 0.8 times its net asset value, which takes into account debt and preferred stock debt.
He wrote:
“They’re selling MSTR stock worth 80 cents on the dollar to buy $1 bills.”
In his view, the issue is not whether issuing common stock can improve the capital structure of creditors. The question is whether public shareholders benefit when a company with negative cash flow relies on capital markets to pay down debt and preferred stock debt while continuing to buy Bitcoin.
Coin Bureau CEO Nic Puckrin made a similar point, saying that Strategy is left with few clean options if its common stock trades below the value of its Bitcoin holdings.
He said issuing more shares could dilute Bitcoin per share, and issuing more preferred stock would increase future cash obligations. At the same time, selling Bitcoin could undermine market confidence, and halting dividends could alienate preferred holders.
However, Dylan Leclair, director of Bitcoin strategy at Metaplanet, rejected that view. He argued that because Strategy’s enterprise value exceeds Bitcoin’s net asset value, its common stock could still trade at a premium even after deducting debt and preferred stock.
From that perspective, issuing common stock can be positive for the capital structure. LeClair said the move could increase net asset value in USD per share and reduce leverage, even as it puts some pressure on Bitcoin per share.
Independent market analyst Adam Livingston also supported Thaler’s broader framework. He argued that the deal would have been higher if it included both Strategy’s new Bitcoin and larger cash reserves.
According to Livingston’s calculations, the purchase of 1,587 BTC and increase in reserves by approximately $100 million added approximately 3,146 BTC equivalent to the common residual. This increased common stock Bitcoin exposure from 145,142 Satoshis to 145,319 Satoshis per share.
he said:
“BTC alone seemed diluted, but BTC and cash increased.”
His argument reflects Saylor’s broader case: ordinary shareholders don’t just own their latest Bitcoin purchases. They own the remaining claims on Strategy’s entire balance sheet after taking into account debt, preferred stock, and other senior claims.
MSTR’s more difficult test is investor confidence
The controversy reflects a broader shift in the way investors judge strategy. During Bitcoin’s rally, it was easy to defend the company’s model of raising capital, buying Bitcoin, and trading it at a premium to the value of its holdings.
However, the current market is not as forgiving. While the fall in Bitcoin has compressed premiums, preferred dividends, debt, and future financing needs have become a larger part of the investment case.
That’s why today’s $100 million acquisition is attracting attention beyond its size. BTC yields have fallen, reinforcing the dilution argument. Cash reserves increased, supporting Thaler’s contention that Strategy’s broad-based residual value had improved.
The next test will be whether investors continue to accept the framework. As long as the capital markets are open, the strategy can continue to buy Bitcoin. A more difficult question is whether to continue treating this strategy as incremental at a time when common shareholders’ direct claims to Bitcoin per share are decreasing.
(Tag Translation) Bitcoin
