Major Bitcoin Acquisition
Strategy made its largest Bitcoin purchase in nearly a month, spending $43 million to acquire 390 Bitcoin according to a company announcement on Monday. This marks the company’s most significant acquisition since late September when it bought $22 million worth of the cryptocurrency.
The Tysons Corner-based firm now holds approximately 640,800 Bitcoin in its treasury, a stockpile recently valued at $73.6 billion based on Bitcoin’s trading price around $114,800. The timing of this purchase coincided with Bitcoin hovering near a two-week high, benefiting from easing geopolitical tensions between the U.S. and China that have been supporting risk assets lately.
Market Reaction and Funding Strategy
Following the announcement, Strategy shares rose 1.9% to $294 shortly after markets opened. However, the company’s stock price has still declined 4.8% from $314 over the past month. What’s interesting about this latest purchase is how it was funded – through proceeds from preferred share issuances rather than the company’s traditional method of common share offerings.
Strategy hasn’t issued common shares since around September 29, when it announced a $22 million Bitcoin purchase. At that time, the company indicated it had raised $128 million, leaving it with extra cash on hand as dividend payments approached. This shift in funding approach represents a notable change from Strategy’s historical practice of issuing common shares at a premium relative to its Bitcoin holdings to grow its cryptocurrency stockpile.
Changing Purchase Patterns
As Strategy moved away from common share issuances, its Bitcoin purchases had become relatively smaller in recent weeks. The company acquired 196 Bitcoin, then 219 Bitcoin, before this latest 390 Bitcoin purchase. These were among the smallest Bitcoin purchases Strategy has disclosed this year, making the $43 million acquisition stand out as a return to larger-scale buying.
The company has introduced several types of preferred shares this year as alternative funding mechanisms for its Bitcoin acquisitions, with some of these products requiring quarterly dividend payments. This diversification in funding sources appears to be part of a broader strategic shift.
