MicroStrategy Continues Bitcoin Buying Despite Weaker Market Valuation

MicroStrategy (MSTR) continued its Bitcoin (BTC) accumulation last week, purchasing 1,665 BTC for $142.7 million. The average price per coin, including fees, was $85,681. This brought the company's total holdings to 847,666 BTC, acquired at a combined cost of $63.95 billion.

Critics like Peter Schiff argue that MicroStrategy no longer has the financial means to continue buying Bitcoin. However, the company's filings tell a different story. While its primary funding method, selling MSTR shares, has become less valuable, its preferred-stock channel remains open. During the week ending September 27, MicroStrategy sold 1,469,165 MSTR shares, raising $246.2 million in net proceeds. It allocated $142.7 million to Bitcoin purchases and $103.5 million to repurchasing STRC shares.

MicroStrategy still has significant issuance capacity, with $18.84 billion available for MSTR shares and $17.51 billion for STRC shares as of late September. Additionally, it retained $1.00 billion in flexible cash. However, the company's market-to-net-asset valuation has dropped to 1.0, down from a peak of 3.4 in November 2024. This lower valuation makes common-stock issuance less attractive for funding future Bitcoin purchases.

MicroStrategy has also adjusted its strategy to manage its treasury. Between May and August, it sold 6,948 BTC for approximately $432.5 million to fund dividends and preferred-share buybacks. While the company's Bitcoin-buying capacity is not gone, the funding model is no longer as effortless as it once was. The next challenge will be sustaining these purchases without overburdening shareholders or relying too heavily on selling stock below the value of its Bitcoin holdings.