Key Takeaways:
Strategy (MSTR) purchased an additional 535 bitcoin for approximately $43.0 million in cash, according to a regulatory filing on May 11, reinforcing its accumulation strategy just days after executive chairman Michael Saylor raised the possibility of the firm selling BTC for the first time.
"I believe in math over ideology," CEO Phong Le said on the company's Q1 earnings call. "At the point where selling bitcoin versus selling equity to pay a dividend is better for our bitcoin-per-share, and for our common shareholders, we will do it."
The purchases, made between May 4 and May 10 at an average price of $80,340, bring the company’s total holdings to 818,869 BTC. The firm’s bitcoin was acquired for a total cost of approximately $61.86 billion, reflecting an average cost basis of $75,540 per coin. The acquisition was funded through at-the-market offerings of its common stock, which raised $42.9 million, and its preferred stock STRC, which raised $0.1 million.
The discussion around potential sales appears to be a strategic financial maneuver rather than a change in philosophy. The company recorded a $12.54 billion unrealized loss in Q1 due to new FASB fair value accounting rules, creating a significant deferred tax asset. In a move similar to a December 2022 tax-loss harvesting transaction, selling bitcoin could allow Strategy to realize losses to offset prior capital gains and secure tax benefits.
Following the earnings call, Saylor moved to control the narrative. In a podcast interview, he stated that for every one bitcoin the company might sell for strategic reasons, it would acquire 10 to 20 more. “You should be a net accumulator of bitcoin,” he said. “You want to end every year with more bitcoin than you started.” Monday’s filing confirmed the buying continues.
With bitcoin trading around $81,000 as of Monday morning, Strategy’s holdings are currently in profit. The company's shares (MSTR) rose approximately 1% in pre-market trading following the announcement, after closing the previous week up 9.8% at $187.59.
This article is for informational purposes only and does not constitute investment advice.
