Key Points
- Michael Saylor plans to sell $21B of Strategy’s preferred stock (STRK) to fund Bitcoin purchases and corporate operations.
- The company’s unrealized profit on its Bitcoin stash has decreased from $20B to $7B.
Michael Saylor has revealed an ambitious plan for his company, Strategy (previously known as MicroStrategy). The strategy involves selling $21B worth of preferred stock (STRK) to fund purchases of Bitcoin (BTC) and corporate operations.
The company, a pioneer in corporate Bitcoin strategy, has been aggressively purchasing Bitcoin through stock issuance and convertible notes. In order to raise capital for Bitcoin investment, the firm utilizes its common MSTR and preferred STRK stocks.
Strategy’s Bitcoin Plan and Reactions
If the latest capital raise is successful, the firm could potentially acquire Bitcoin at a relatively discounted rate following a recent retracement. As of early March 2025, Strategy held 499,096 BTC, valued at $40B and representing 2.3% of the total supply.
However, the Q1 2025 Bitcoin drawdown has led to a significant reduction in Strategy’s unrealized profit. In February, when Bitcoin surged to $109K, Strategy’s unrealized profit nearly reached $20B. At present, the profit has decreased to $7.2B, but the firm remains optimistic for the long term.
Peter Schiff, however, has expressed doubts about Strategy’s ability to raise such a significant amount, given the current subdued Bitcoin price activity. In contrast, Jesse Myers, co-founder of OnRamp Bitcoin, believes that the STRK stock issuance could provide Strategy with an efficient way to raise capital from the bond market.
Regarding price performance, MSTR has fallen 56% to the last U.S. election level of $240, a trend seen across most U.S. equities. Over the same period, Bitcoin has dropped about 30%, which analysts suggest is a standard pullback for the cryptocurrency during bull runs.
At the moment, Bitcoin is trading below $80K, but was above this level prior to the release of key U.S. economic data. Whether Bitcoin will reverse Q1 losses and provide a relief recovery for MSTR remains to be seen.
