Saylor Defends Strategy's Bitcoin Holdings: 7% Not Too Much
Key Takeaways
- Michael Saylor believes owning up to 7% of Bitcoin's total supply is justifiable for Strategy.
- Strategy reported a profitable Q2, marking its first positive quarter after several losses.
Michael Saylor, Chairman of Strategy (MicroStrategy), has addressed concerns regarding the company's extensive Bitcoin (BTC) investments, which currently account for 3% of the total BTC supply.
In a recent CNBC interview, Saylor stated, "I don’t think owning 3% to 7% of Bitcoin supply is too much. BlackRock has more than that."
Strategy presently holds 628,791 BTC. Targeting 7% would mean accumulating around 1.5 million BTC.
Record Q2 Profit and BTC Plans
Strategy announced a profitable Q2 during its latest earnings call on July 31, reporting $10 billion in net income—its first profitable quarter after consecutive losses.
The firm's BTC holdings gained $13.2 billion year-to-date. Acquisitions have been financed via stock issuance and debt.
To mitigate share dilution from ongoing stock sales, Strategy plans to sell MSTR shares only when the modified net asset value (mNAV) exceeds 2.5x. VanEck’s Matthew Sigel praised this as ‘best in class’ treasury management.
Currently, the mNAV stands at 1.62x, down from its peak of 3.89x last November.
Strategy will now focus on yield-bearing preferred perpetual stocks, including Stretch [STRC], Strike [STRK], Stride [STRD], and Strife [STRF], to fund BTC purchases.
Stretch [STRC] seems the preferred option, highlighted by its recent $2.5 billion raise to acquire over 21,000 BTC. Saylor describes it as a ‘treasury BTC,’ akin to a money market fund.
He positions MSTR common stock as ‘amplified BTC’ for investors seeking 2x BTC exposure.
Saylor views MSTR as undervalued, citing its estimated $24 billion net income, echoing the firm's sentiment: "Strategy is misunderstood and undervalued $MSTR."
Wall Street analysts at Benchmark have reiterated this view, issuing a buy rating for MSTR with a price target of $705, noting that "MSTR is not just buying bitcoin anymore, but instead engineering a corporate treasury machine designed to generate Bitcoin-denominated returns, manage its capital raises with precision, and scale faster."
At press time, MSTR was valued at $366.63, an 8.7% decrease in intraday trading on August 1, while BTC was down only 2%.
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