Strategy Inc.'s Saylor Prepares Investors for Difficult Years Ahead
Strategy Inc., parent company of the Galaxy Digital investment firm, defended its Bitcoin-focused capital strategy despite the cryptocurrency's recent decline and the significant drop in its own stock price.
In a recent investor Q&A session, CEO Phong Le acknowledged that shareholders have been frustrated by the company's decision to issue more equity to acquire Bitcoin. However, he explained that this move is designed to provide amplified exposure to the cryptocurrency, which can lead to both higher gains and losses.
Executive Chairman Michael Saylor, who personally owns over 19 million MSTR shares, echoed Le's sentiments, stating that investors should be prepared for difficult years ahead. He emphasized that the company has a seven-to-10-year investment horizon and is focused on building its digital-credit business while acquiring Bitcoin.
Saylor also highlighted that the traditional notion of equity issuance being dilutive to shareholders may not apply in this case, as issuing shares above 1x net asset value can actually be accretive on a BTC-per-share basis. He believes prioritizing short-term support for MSTR could undermine its long-term value proposition.
The company's central objective has shifted from accumulating Bitcoin at any price to building the world's best credit, particularly through STRC, and using proceeds to acquire Bitcoin, maintain dollar reserves, or manage its capital structure. Saylor estimates the digital-credit market will expand from $15 billion today to $100 billion, $400 billion, and ultimately $1 trillion.