‘Strategy’ resumes its Bitcoin accumulation strategy after stopping purchases for about 10 weeks.
The company led by Michael Saylor bought Bitcoin worth US$369.7 million (around RM1.5 billion) for the week ending August 30, according to a filing on Monday.
The purchase shows Strategy is still confident in Bitcoin despite the company’s shares facing significant pressure throughout the year.
Raise Capital Before Buying Bitcoin
During the same period, Strategy raised around US$602.8 million through the sale of common shares.
Part of the funds were used to finance the purchase of Bitcoin, while the company also bought back US$151.8 million in preferred shares.
Strategy’s management has so far relied on the company’s ability to issue shares to raise capital before using it to increase its Bitcoin holdings.
However, the previous fall in share prices has made this financing model even more challenging.
Bitcoin Recovers, Strategy Shares Also Rise
Bitcoin’s recovery to around US$79,000 has helped improve Strategy’s position to some extent.
The company now owns about $73 billion worth of Bitcoin, making it one of the world's largest corporate holders of Bitcoin.
Strategy shares also rose 4.4% to $132.94 on Monday.
However, the stock is still down about 60% in a year, suggesting the recovery is not yet strong enough to restore the high valuation the company once enjoyed when the crypto market was in a bullish phase.
Strategy Strengthens Cash Reserve
Last week, Strategy also created a separate cash reserve in addition to its existing reserves.
The move will give the company more flexibility to meet preferred stock dividend payments, debt and other corporate needs.
The two reserves amount to about $5.1 billion and $1.61 billion, respectively.
The Bitcoin buying strategy is still ongoing, but the strength of Strategy's financing model has not returned to its previous levels.
The latest $370 million purchase, however, shows that the company still sees Bitcoin as a key asset in its corporate strategy.
