Saylor's Strategy Hits Pause: No More Regular Bitcoin Buys

Michael Saylor's Strategy has paused its regular Bitcoin buys for five weeks, and it's not just a temporary pause. The company recently sold some of its reserves, which is another shift in its approach.

The 'flywheel' strategy that Strategy popularized relies on the stock trading at a premium to net asset value (NAV). However, this isn't the case right now. Strategy trades at 0.60 times its NAV, but rises to about 1 times NAV when accounting for enterprise value and capital structure obligations.

Strategy needs cash reserves to fund its preferred stock dividend, which includes $1.76 billion in annual payments and interest on debt. The company has raised the dividend rate on Stretch to 12% on July 1, requiring a significant amount of cash.

The company's software business doesn't bring in nearly enough money to fund these obligations, with trailing revenue at $490 million.