- Michael Saylor and his company issued over 875,000 new shares after changing their shareholder dilution policy.
- The sale brought in approximately $309 million and occurred at less than 2.5 times the company’s net asset value (mNAV).
- The original policy restricted such share sales, but the revised version now allows them for greater capital flexibility.
- The proceeds from share and preferred stock sales enabled the purchase of $356.9 million in Bitcoin.
- The company’s stock price fell 4.8% in the past week, performing slightly worse than the decline of bitcoin itself.
Michael Saylor and his company, now operating as Strategy (formerly MicroStrategy—MSTR), issued 875,301 additional shares today through their at-the-market (ATM) offering. This action follows an immediate update to their policy regarding shareholder dilution, with the stated aim of adding flexibility to their capital market activities.
This share sale, which raised about $309 million, occurred at an enterprise value multiple-to-net asset value (mNAV) of just 1.59 times. This figure is below the previous company limit of 2.5x mNAV for issuing new shares, a rule that was in place earlier this quarter. The restriction was removed from the company’s updated earnings presentation released on August 18, with the revised policy stating the change was made to “provide greater flexibility in executing our capital markets strategy.”
A previous executive statement, dated July 31, explained that selling shares at a price between 1x and 2.5x mNAV was not considered beneficial for shareholders over the long term, especially in terms of bitcoin holdings per share. The company has since shifted its position. The new policy allows issuing shares below this threshold if it benefits corporate strategy.
With these transactions, Strategy used the $309 million from the share offering, along with capital raised from preferred shares, to purchase $356.9 million in bitcoin. As a result, the company’s bitcoin holdings have increased, further aligning the value of MSTR with the cryptocurrency’s price movements.
Over the past week, the price of MSTR shares decreased by 4.8%, a slightly greater drop than bitcoin’s 3.2% decline over the same period. Most market observers assess MSTR‘s value primarily based on its bitcoin holdings rather than traditional earnings.
Going forward, Strategy states it will make future dilution decisions between 1x and 2.5x mNAV “when otherwise deemed advantageous to the company.” For more information, you can review the updated company filings here and the revised presentation here.
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