Strategy stock rises following $742.4M Bitcoin acquisition

Strategy, formerly known as MicroStrategy, disclosed the purchase of an additional 7,633 bitcoins for approximately $742.4 million, at an average price of $97,255 per bitcoin. The acquisition, carried out between February 3 and February 9, increases the company’s total bitcoin holdings to 478,740, valued over $46 billion.

Strategy’s executive chairman, Michael Saylor, noted that the company’s total bitcoin assets were acquired at an average price of $65,033 per bitcoin, summing up to around $31.1 billion, inclusive of fees and expenses.

Strategy now commands more than 2.2% of the total 21 million bitcoin supply. The recent purchase follows the company’s sale of 516,413 shares of its class A common stock and 7,300,000 shares of its 8.00% Series A Perpetual Strike Preferred Stock, totaling $742.4 million. As of February 9, Strategy has about $4.17 billion worth of shares remaining for sale under its "21/21 plan," which aims to raise a total of $42 billion through equity offerings and fixed-income securities for further bitcoin acquisitions.

Michael Saylor hinted at future bitcoin purchases by referencing Strategy’s bitcoin purchase tracker on Sunday. The company, which underwent rebranding on Wednesday, including a new logo with a stylized "₿" symbol, has recently bought roughly $20 billion in bitcoin, pausing its buying streak during its earnings release last week.

Strategy reported a significant net loss of $670.8 million for the fourth quarter of 2024, with operational expenses surging 693% year-over-year to $1.1 billion. This includes impairment losses of over $1 billion on its bitcoin holdings.

The company is set to adopt the Financial Accounting Standards Board’s new fair-value accounting rules starting January 2025, which will allow for a one-time cumulative adjustment of $12.75 billion to its retained earnings balance. However, the tax implications of these new accounting rules in conjunction with the 2022 Inflation Reduction Act provisions remain unclear, with Strategy possibly needing a special exemption from the IRS.

Strategy’s market capitalization stands at $82.3 billion, trading at a significant premium to its bitcoin net asset value. This premium, along with its strategy for funding bitcoin acquisitions through equity and debt, has led to some investor concerns.

Despite this, Strategy shares closed up 0.7% at $327.56 on Friday and were trading up 1.9% in pre-market trading on Monday.

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