MicroStrategy announced today that it has spent nearly 1 billion USD to acquire an additional 10,624 BTC, bringing the company's total Bitcoin holdings to 660,624 BTC.
This purchase took place during a time when Michael Saylor, the leader of MicroStrategy, was under close scrutiny, as the company faced significant pressure during the market downturn caused by Bitcoin's weak price performance.
Accumulation continues as pressure increases.
Despite the ongoing release of information that raises doubts about the company, Saylor continues to expand MicroStrategy's Bitcoin holdings, ignoring public criticism.
The price of Bitcoin has softened over the past two months, failing to return to the 100,000 level lost in November, and is now trading at approximately 89,950 USD.
MicroStrategy, which currently acts more as a Bitcoin-focused treasury than a typical software company, has been heavily impacted, as the company's value moves in tandem with Bitcoin's volatility, creating continuous obstacles.
However, the company continues to buy more. Notably, MicroStrategy did not buy during the downturn to 86,000 USD over the weekend but announced the latest purchase while Bitcoin was bouncing back to 90,615 USD.
Many view this move as a way to boost morale and maintain the loyalty of investors. However, some analysts believe that MicroStrategy's ability to raise funds for future Bitcoin purchases may weaken.
Analysts from Novacula Occami noted that in this latest purchase, MicroStrategy was able to sell preferred shares for only 44 million USD last week, which is a very small amount compared to past fundraising.
This indicates that the market may not be ready to lend or buy their preferred shares.
As the use of loans becomes more complicated, MicroStrategy is reverting to issuing common shares instead, in this case selling 5.1 million shares of MSTR at a price of 181 USD per share, which dilutes the holdings of current shareholders.
Given MicroStrategy's current condition, this approach may not be sustainable for much longer.
MicroStrategy experienced a severe downturn in early December when the company's market capitalization fell below the net value of its Bitcoin holdings. This event raised new concerns about the use of liabilities, cash reserves, and overall investor confidence.
The stock price fell to 156 USD, reducing the company's value to 45 billion USD. Meanwhile, the value of MicroStrategy's Bitcoin holdings is approximately 55.2 billion USD, which is an unusual time for the market to value the company lower than its actual assets.
MicroStrategy has stood firm again. However, if the company's stock trades below the value of its held assets again, issuing new shares will become more difficult and less effective.
As borrowing continues to dry up and the decline in stock becomes a lesser risk, MicroStrategy may reach a point where it cannot raise enough funds to continue its accumulation plan.
