Michael Saylor’s Strategy loosens stock sale limits to sustain Bitcoin strategy

Michael Saylor’s Strategy Inc. is adjusting its financing playbook, easing restrictions on stock sales just weeks after pledging tighter rules.

According to an Aug. 18 report by Bloomberg, the change gives the Bitcoin-heavy company greater flexibility to raise funds as its share premium over Bitcoin (BTC) holdings narrows.

Strategy’s stock issuance rules shift

Previously, the company had promised not to issue new shares if its stock traded at less than 2.5 times the value of its Bitcoin holdings, a buffer Saylor termed the “mNAV premium.” That limit was intended to reassure investors concerned about dilution. Exceptions were only allowed to cover debt interest or preferred equity dividends.

Under the updated policy, Strategy will permit stock issuance below the 2.5x threshold “when otherwise deemed advantageous to the company.” Analysts like Brian Dobson of Clear Street said the additional language allows Saylor to be more opportunistic in financing Bitcoin purchases.

The shift comes as demand for the firm’s preferred stock program, a novel perpetual equity product Saylor unveiled in July, faces uncertainty. Investor appetite has been tested by falling premiums on Strategy’s shares and increasing competition from Bitcoin ETFs and other crypto-treasury firms.

Slower purchases, strong holdings

Strategy’s pace of Bitcoin accumulation has moderated. The company disclosed on Aug. 18 that it bought 430 Bitcoin for $51.4 million in the prior week, following a 155 BTC purchase the week before. In total, Strategy now holds 629,376 BTC, acquired at an average price of $73,320. With Bitcoin trading near all-time highs around $119,666, the firm sits on more than $26 billion in unrealized gains.

Despite these gains, Strategy’s stock has fallen 22% since reaching a record in November, lagging Bitcoin’s 23% rally over the same period. Short sellers like Jim Chanos have questioned whether the firm’s four series of preferred stock offerings can offset reduced at-the-market equity sales.

The latest revision shows how quickly Saylor’s bold financing strategy is being tested. While easing restrictions may reassure the company’s ability to keep building its Bitcoin reserves, it also highlights investor concerns about dilution and long-term sustainability.