Strategy’s latest $357 million stock sale has rattled investors, reigniting debate about whether the firm’s pursuit of Bitcoin is coming at too steep a cost for equity holders.
The company updated its equity issuance rules on August 18 — and almost immediately flooded the market with new stock. Data from analysts show a dramatic shift: only small issuances earlier in the month, followed by a sharp ramp-up to more than $360 million raised in the days after the policy change.
The proceeds funded the purchase of 3,081 Bitcoin, pushing Strategy’s holdings to 632,457 BTC — about 3% of the circulating supply. With a public target of 1 million coins, the company is now roughly 60% of the way there.
How the New Framework Works
Strategy’s issuance is now tied to a metric called market net asset value (mNAV), which measures the stock price relative to the company’s Bitcoin holdings. If shares trade at more than 4x mNAV, the firm sells aggressively to buy more Bitcoin. Between 2.5x and 4x, it sells more selectively. Below 2.5x, the focus shifts to debt repayment or dividends.
Critics note this marks a reversal from earlier pledges not to sell stock for Bitcoin purchases when mNAV was under 2.5x.
Dilution Becomes the Flashpoint
The $310 million raised from common stock and $47 million from preferred shares helped expand Strategy’s Bitcoin treasury but also expanded the shareholder base. Investors argue that issuing stock while valuations are relatively low dilutes existing holders, effectively reducing the Bitcoin-per-share backing.
Although the company has room to borrow — debt currently sits at about 20% of Bitcoin NAV with capacity up to 30% — the choice to lean on equity instead of leverage has drawn criticism from those concerned about weakening per-share economics.
The Bigger Picture
Strategy’s Bitcoin-first approach continues to make it a dominant corporate holder of the asset, but the path it’s taking — trading dilution risk for more coins — is testing investor patience. With nearly 400,000 BTC left to reach its stated goal, the balance between aggressive accumulation and shareholder value could define the company’s next chapter.
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Source: https://coindoo.com/investors-panic-as-strategy-sells-more-stock-to-chase-bitcoin/
