Strategy jumps back into bitcoin with $370 million purchase

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• MSTR
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Scott Melker discusses Michael Saylor’s Strategy (MSTR) restarting its bitcoin (BTC-USD) buying spree with a $370 million purchase, marking the company’s first bitcoin acquisition in nearly 10 weeks.

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We got to talk about Michael Sailor. It’s become a tradition and today we have a lot to talk about. If you miss the news, here it is.

Sailor strategy restarts Bitcoin buying, spending 370 million dollars. So,

they purchased 4,603 Bitcoin for $369.7 million paying an average of 80,318 per Bitcoin. Now, if you pay attention,

you tend to see that the highest price of the week is the price that Sailor and strategy buy Bitcoin at.

I don’t know what formula they’re using. I don’t know how they time the market, but they tend to always buy the high in whatever period they are buying.

So this was their first Bitcoin purchase in roughly two months, actually almost 10 weeks and strategy now owns 845,050 Bitcoin

acquired for $63.73 billion at an average price of $75,412. So right now,

Sailor after being underwater by over $10 billion is back in profit.

But the big story here is not that they bought Bitcoin or that they bought Bitcoin higher, it’s how they bought Bitcoin.

And they did it by selling 4.53 million newly issued MSTR shares, which raised 602.8 million. But whoa, whoa, whoa, whoa.

They raised $602 million, they bought $370 million worth of Bitcoin. What happened to the rest of the money?

You’re wondering, this is what happened. It was divided four ways.

370 million bought Bitcoin, 151 million repurchased STRC shares. They’re working very hard to push that back up to par at 100.

50.7 million paid STRC dividends and of course, they already have over $5 billion saved for that. So the fact that they’re paying them in real time and have it saved means your concerns about STRC should be over.

And they used 30 million to increase the USD cash. So they actually added to the cash reserve while buying Bitcoin.

So in other words, only about 61% of the common stock that they sold this week went to purchase Bitcoin. The remainder supported the preferred stock structure and their liquidity.

But when you dig into this, this week’s issuance increased common share count of strategy by 1%. If you go back for the last three weeks, they’ve increased the share count by 6%. So 6% dilution relative to the pre-issuance share count. So

if you’re a strategy holder, you’re getting diluted massively, doesn’t mean the value won’t come back so that they can support STRC and of course now to buy more Bitcoin. This is only becoming more complicated. I mean, listen,

they’re buying Bitcoin at 80 after selling at 64 or 65. I don’t think anybody generally wants to see that.

That’s said if STRC comes back to par, and they’ve proven now that they have a huge cash reserve and are willing to buy Bitcoin, they could help push the market up and once again become the floor buyer of Bitcoin.

Really interesting times to be alive right now, regardless we have seen him. I got to show it. Last week he was puking out cash and he had a hose in his mouth for some reason.

This week, Sailor’s back to being Mega Made and sucking.

Source: finance.yahoo.com