President Donald Trump has once again called stock buybacks a fake way to pump up share prices, but MicroStrategy's Bitcoin model points to a different path to higher valuation, built on issuing shares instead of buying them back.
Hans latest statements are aimed at defense contractors. They also sharpen a broader debate on how companies influence their own stocks, whether through buybacks that reduce the share count or through dilution that finances a growing Bitcoin stash.
What Trump said about buybacks
Trump has again pressured defense firms on how they spend their money. In January, he signed an executive order prohibiting underperforming contractors from making buybacks and dividends until production improves.
His argument is straightforward. Buybacks inflate the stock price without building real capacity, so he wants the funds to be used for infrastructure, equipment, and faster production.
*TRUMP: STOCK BUYBACKS ARE A FAKE WAY TO RAISE A PRICE
— tradfi news (@tradfi) June 22, 2026
The policy targets major contractors like Lockheed Martin, Northrop Grumman, and RTX. Trump has returned to this theme this week, and his comments on buybacks have previously caused unrest in defense stocks.
This is how the MicroStrategy Bitcoin model works
MicroStrategy (now Strategy) is going in the opposite direction. The company isn't buying back its own shares. They are selling new shares and preferred shares, using the proceeds to buy Bitcoin.
This dilution and debt strategy has built up a stash of over 845,000 Bitcoin (BTC), the largest holding among publicly traded companies.
Michael Saylor presents each capital raise as a way to increase Bitcoin per share. These purchases now account for over four percent of all BTC in circulation.
The company has even bought back debt by repurchasing convertible loans at a discount this year. They have also focused on issuing preferred shares to continue purchases without taking on new senior loans.
Follow us on X for the latest news as it happens
Why the premium decides everything
The model works like a flywheel. MicroStrategy issues shares at a price above the value of their BTC, buys more Bitcoin, and increases Bitcoin per share, which can maintain a premium over equity value.
This premium has shrunk in 2026. With Bitcoin trading around $ 64,360, the holding is close to the average price MicroStrategy has paid.
The stock has fallen by more than half in the past year, and the market cap has dropped to around $ 40 billion.
When the premium disappears, new stock sales add less value. The same dilution that previously generated gains now provides weaker support, as seen during the latest downturn in Bitcoin.
Both stories boil down to one question. Investors and regulators want to know whether a company is creating value or just moving the stock price.
For MicroStrategy, the answer might lie in whether Bitcoin climbs back above the cost price and restores the premium.