MW 'He almost has to keep buying': Why Michael Saylor's Strategy is doubling down on bitcoin.
By Frances Yue
Strategy said on Monday it bought nearly $1 billion of bitcoin last week, its biggest single-time purchase since July. Skeptics were worried the company might struggle to raise additional capital.
Strategy's Executive Chairman Michael Saylor has been pushing forward the company's bitcoin purchase strategy.
Michael Saylor's bitcoin treasury company Strategy on Monday said it bought another roughly $1 billion of bitcoin last week, its biggest single-time purchase since July, defying skeptics who had worried the company might struggle to raise additional capital to expand its crypto holdings.
Analysts said the move could help bolster a beleaguered bitcoin (BTCUSD) market that has fallen 29% from its record peak in October. Yet the purchase also highlights a deeper question about how Strategy (MSTR) sustains its model.
Strategy's latest acquisition does not simply reflect Saylor's personal conviction in bitcoin, but shows a structural need for the company, according to Louis LaValle, co-founder and chief executive at crypto investment-management company Frontier Investments. "Michael Saylor having conviction in bitcoin and buying it is not what's happening here. He needs to [raise money to buy bitcoin] to keep the engine running," LaValle said. "He almost has to keep buying at this point." LaValle does not have any Strategy exposure.
Strategy did not respond to an email seeking comment.
Originally a software business, Strategy pivoted to a different playbook in 2020 by raising equity and debt to buy bitcoin, making the crypto the core of its balance sheet. Some investors have been drawn to Strategy's shares as a way to gain bitcoin exposure without holding the cryptocurrency directly. Strategy also acts as a leveraged bitcoin vehicle, meaning that gains and losses can be magnified.
Strategy disclosed on Monday it bought 10,624 bitcoins from Dec. 1 to Dec. 7 for $962.7 million, bringing its total holdings to 660,624 bitcoins, or roughly 3.3% of the crypto's current supply, according to a filing with the U.S. Securities and Exchange Commission. The purchase was funded by proceeds from sales of the company's common shares and perpetual preferred stock.
LaValle at Frontier said the company's sizeable financial obligations were likely a key driver. Notably, in addition to its debt payments, Strategy now faces roughly $800 million in total annualized dividend obligations across its outstanding perpetual preferred shares, based on the company's investor presentation as of Dec. 1.
In LaValle's view, Strategy does not generate enough sustainable cash flow to repay the dividends each year, and therefore must rely on selling stock to meet those obligations. Strategy moved to establish a $1.44 billion U.S.-dollar reserve last week to support dividend payments on its preferred stock and interest. That reserve was funded through proceeds from the sale of common shares.
But that also makes ongoing investor demand for Strategy's shares critical to the company's survival.
"To sell stock at a high enough price to pay that bill without obviously destroying the company, Saylor has to keep hyping up that he would buy more bitcoin," LaValle said. Saylor has built a narrative that Strategy could be a perpetual bitcoin-accumulation vehicle, and maintaining that narrative is essential to keep its stock appealing, he added.
"If Saylor goes [to investors] and says, 'I'm no longer buying bitcoin,' he completely flips the narrative. You can almost think about it like a shark, and if he stops swimming, he dies," LaValle said. However, LaValle also thinks that there's a good chance that Strategy could face liquidity issues at some point, if bitcoin price keeps going south.
Strategy's shares rose 2.6% to $183.69 on Monday, but were 61.2% off their record high at $455.90 reached on Nov. 20, 2024.
The appeal of Strategy's shares has been fading lately, with the stock trading below the value of the bitcoin it holds since November, reversing the premium it previously enjoyed, according to data provider BitcoinTreasuries.net. The company's shares are trading at a 12% discount to the value of the bitcoin it holds as of Monday, compared with a premium of as much as 700% in 2020.
Yet Mark Palmer, senior research analyst at the Benchmark Company, said Strategy's latest bitcoin acquisition signals the company remains committed to its crypto accumulation strategy.
Palmer added that the move also helps restore confidence in Strategy's ability to raise capital. "The fact that Strategy was able to sell both common equity and preferred means that there's a market for its securities," he said in a phone interview.
Meanwhile, "Strategy making a purchase of this size is a bullish signal" for a sluggish bitcoin market, he added. Bitcoin rose 1.2% on Monday afternoon to trade at around $91,310, according to MarketWatch data.
-Frances Yue
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 08, 2025 17:30 ET (22:30 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments