The business intelligence firm Strategy has increased its Bitcoin holdings again, acquiring an additional 390 coins for approximately $43.4 million. This latest purchase, disclosed in a filing on October 27, pushes the company's total reserves to a substantial 640,808 BTC.
Notably, the acquisition was financed entirely through the sale of preferred stock, marking the fourth consecutive week the company has avoided issuing new common shares. This move signals a potential shift in capital strategy, prioritizing shareholder value by preventing dilution while continuing its aggressive Bitcoin accumulation.
Key Takeaways
- Strategy acquired 390 Bitcoin for $43.4 million, at an average price of $111,117 per coin.
- The company's total Bitcoin holdings have now reached 640,808 BTC.
- The purchase was funded through the issuance of preferred shares, not common stock (MSTR).
- This is the fourth week in a row that Strategy has not diluted common shareholders to fund its Bitcoin buys.
A Disciplined Funding Approach
Strategy's method for this recent purchase highlights a disciplined approach to its treasury management. Instead of issuing more of its widely-traded MSTR common stock, the company raised capital through its different classes of preferred shares.
According to the filing, the funds were generated from the sale of $19.4 million in STRF shares, $17.0 million in STRK shares, and $7.0 million in STRD shares. This strategy allows the company to tap into capital markets without increasing the number of outstanding common shares, a move often favored by existing investors as it prevents the value of their holdings from being diluted.
Understanding Share Dilution
When a company issues new common stock, the total number of shares increases. This means that each existing share represents a smaller percentage of ownership in the company, which can reduce its value. By using preferred stock, Strategy raises money without affecting the ownership stake of its common shareholders.
This decision contrasts with some of the company's previous capital-raising activities. The last sale of common stock occurred between September 22 and 28, raising $116.4 million. Those proceeds were primarily used to cover dividend payments on its preferred stock, not to purchase more Bitcoin.
Expanding the Bitcoin Treasury
With this latest acquisition, Strategy's total investment in Bitcoin now stands at approximately $47.44 billion. The company has accumulated its 640,808 BTC at an average price of $74,032 per coin, showcasing its long-term commitment to the digital asset as its primary treasury reserve asset.
The price paid for the most recent batch of coins—an average of $111,117—reflects the current high valuation of Bitcoin, driven by strong institutional demand. Strategy's continued purchasing at these levels indicates a strong conviction in the asset's future appreciation.
Strategy's Bitcoin Holdings by the Numbers
- Total Bitcoin Held: 640,808 BTC
- Total Investment Value: ~$47.44 Billion
- Overall Average Purchase Price: $74,032 per BTC
- Most Recent Purchase: 390 BTC for $43.4 Million
- Average Price of Recent Purchase: $111,117 per BTC
For many investors, Strategy's stock has become a proxy for gaining exposure to Bitcoin. Its significant holdings mean that the company's stock price often moves in tandem with Bitcoin's market fluctuations, effectively acting as a leveraged play on the cryptocurrency's performance.
Market Reaction and Investor Sentiment
The market has responded positively to the news of the purchase and the method used to finance it. In pre-market trading following the announcement, shares of Strategy (MSTR) climbed approximately 3.5%.
This uptick suggests that investors approve of the company's ability to increase its Bitcoin exposure while protecting the value of common shares. The pause in common stock issuance could be interpreted as a signal of confidence from management in both the company's financial structure and the long-term potential of Bitcoin.
By relying on preferred share sales, Strategy appears to be sending a quiet message to shareholders that it is prioritizing value per share while maintaining its aggressive accumulation strategy.
This strategic pivot could attract investors who are bullish on Bitcoin but wary of the dilution that has sometimes accompanied Strategy's previous purchases. As the company continues to navigate the volatile cryptocurrency market, its capital management decisions will be as closely watched as its Bitcoin balance.
The focus now shifts to whether this non-dilutive funding model will become the standard for Strategy's future acquisitions, potentially setting a new precedent for how public companies invest in digital assets.
