According to an 8-K filing submitted to the U.S. Securities and Exchange Commission (SEC) on Monday, the investment company Strategy (formerly MicroStrategy) has purchased an additional 10,100 BTC with a total value of approximately 1.05 billion USD, equivalent to an average price of 104,080 USD/BTC, during the period from June 9 to 15.
With the latest transaction, Strategy currently holds a total of 592,100 BTC, worth over 63 billion USD at the current market price. The average purchase price is 70,666 USD/BTC, equivalent to a total cost of about 41.8 billion USD after accounting for fees and related expenses, according to co-founder and CEO Michael Saylor. This holding represents about 2.8% of the total supply cap of 21 million BTC, with an estimated unrealized gain of around 21 billion USD.
Raising capital from preferred stock
This BTC purchase was partially financed by the sale of perpetual preferred shares STRK and STRF in a market price issuance (ATM). Last week, Strategy sold:
452,487 STRK shares, raising approximately 45.2 million USD; the program still has issuance space of 20.57 billion USD.
286,101 STRF shares, raising 28.6 million USD; the remaining program is 1.98 billion USD.
No Class A common stock (MSTR) was sold in the past week, but the ATM program still has a limit of 18.63 billion USD.
The new purchase was mainly supported by a 1 billion USD extended IPO for new perpetual preferred shares named STRD, with a fixed interest rate of 10% per annum, non-cumulative and non-convertible. Meanwhile, STRK is a convertible preferred stock with a fixed interest rate of 8% per annum, while STRF is non-convertible but has an interest rate of 10% per annum and is cumulative.
The '42/42' strategy boosts Bitcoin accumulation
The STRK and STRF stock programs – valued at 21 billion USD and 2.1 billion USD, respectively – are part of Strategy's '42/42' fundraising strategy, aiming for a total fundraising of 84 billion USD through the issuance of stock and convertible bonds to buy Bitcoin by 2027. This is an upgraded version of the previous '21/21' plan.
Last week, Strategy also purchased an additional 1,045 BTC worth about 110.2 million USD (averaging 105,426 USD/BTC), bringing the total holdings to 582,000 BTC before executing the latest purchase of 10,100 BTC – marking the speed of BTC accumulation returning after a few weeks of stagnation due to the shift in focus from common stock to preferred stock programs.
Concerns about BTC concentration in the hands of enterprises
Currently, 228 companies have adopted the Bitcoin accumulation model like Strategy. Recently, several new names such as Tether-backed Twenty One, Nakamoto, Trump Media, GameStop, Semler Scientific, and KULR have also joined this model. The Japanese group Metaplanet announced on Monday that it has purchased an additional 1,112 BTC, bringing its total holdings to 10,000 BTC.
However, the continuous accumulation of BTC by companies is raising concerns about concentration and systemic risk. According to experts from the digital asset bank Sygnum, the dominance of companies like Strategy could render Bitcoin 'unsuitable' for central bank reserves. David Duong, Head of Research at Coinbase Institutional, also warned that this trend could pose 'systemic risks' in the long term.
Michael Saylor remains optimistic. In a recent interview with the Financial Times, he asserted that Strategy's capital structure is designed to withstand a 90% drop in Bitcoin lasting 4-5 years, thanks to a combination of stock, convertible bonds, and preferred stock. However, he also acknowledged that shareholders would still 'suffer losses' in such a scenario. Bernstein analysts agree that Strategy still has relatively low leverage and no debt maturing before 2028, helping to maintain financial stability.
MSTR shares rose 0.8% at the weekend, reaching 382.87 USD, according to The Block. In pre-market trading on Monday, MSTR added 1.6%, bringing the total increase year-to-date to 27.6% – despite geopolitical volatility in the Middle East affecting the market.