Michael Saylor Has Paused Strategy's Regular Bitcoin Buys. What Does That Mean for MSTR Stock?

The world's largest Bitcoin treasury institution isn't buying overmuch Bitcoin lately. Michael Saylor's Strategy (NASDAQ: MSTR) has gone 5 weeks without a Bitcoin acquisition. Its past reported acquisition was during the week of June 15 done June 21, erstwhile it bought 520 BTC for $35 million. That's an mean acquisition terms of $67,068, which is higher than Bitcoin's terms astatine the clip of this penning (July 29).

This intermission is different displacement successful Strategy's approach, pursuing its Bitcoin merchantability successful precocious May 2026. It has since reported 2 much income successful precocious June and aboriginal July. Both moves are a motion that the concern exemplary Strategy popularized isn't moving anymore.

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The extremity of the flywheel strategy

Strategy and the galore Bitcoin treasury companies that followed successful its footsteps utilized a "flywheel" strategy. As agelong arsenic Strategy banal was trading astatine a premium to its nett plus worth (NAV), it could contented much equity and usage the proceeds to bargain Bitcoin. Its "Bitcoin per share" would increase, allowing it to prolong its premium.

A flywheel doesn't enactment erstwhile Strategy trades astatine a discount to NAV, due to the fact that issuing much banal lone lowers its Bitcoin per share. Strategy banal trades astatine 0.60 times its NAV, though that rises to astir 1 times NAV erstwhile accounting for endeavor worth and superior operation obligations.

Still, successful Strategy's existent position, selling banal to money Bitcoin purchases doesn't marque sense. Complicating matters are the different fiscal obligations it has to manage.

Strategy needs to support its currency reserves

Strategy has $1.76 cardinal successful yearly dividend payments and involvement connected its debt. That includes backing the dividend connected Stretch, its perpetual preferred banal designed for investors seeking passive income. Strategy raised the Stretch dividends to 12% connected July 1, truthful it requires a important magnitude of cash.

While Strategy has a bundle business, that doesn't bring successful astir capable wealth to money its obligations. The company's trailing gross is $490 million.

Instead, Strategy has elected to support currency reserves that tin wage astatine slightest 12 months of expected yearly dividend payments and involvement expenses. Its existent reserves of $3.75 cardinal transcend that requirement, covering implicit 2 years of expenses.

Strategy isn't the aforesaid concern