Strategy Silent on Bitcoin Holdings. Why the Stock Is Rising Anyway.

Strategy purchased 8,178 Bitcoins for $835.6 million between Nov. 10 and Nov. 16, according to a securities filing. (AFP via Getty Images)

Key Points

• Strategy, formerly MicroStrategy, is the largest corporate holder of Bitcoin, accumulating 649,870 tokens by Nov. 17.
• Bitcoin’s price fell to $83,669 on Nov. 21, a 3.1% drop in 24 hours and 32% below its October high of $126,272.
• Strategy acquired 8,178 Bitcoins for $835.6 million in the week before Nov. 17, as prices declined.

Strategy , the company formerly known as MicroStrategy, was expected to disclose another Bitcoin purchase on Monday. So far, it hasn’t.

“In the depths of the 2022 crypto winter, our average cost basis was $30K while $BTC traded nearly 50% below it at $16K,” Strategy posted to X on Friday. “What did we do? We bought more.”

Fast forward to Monday. TD Cowen analyst Lance Vitanza wrote in a morning briefing that Strategy hadn’t issued any securities under any of its at-the-market offerings last week, “nor did it purchase any incremental Bitcoin.”

Shares of the Bitcoin treasury company wavered earlier in the session before rising 5% to end the day.

As of Nov. 21, Strategy’s Bitcoin holdings stood at 649,870 tokens, purchased for an aggregate price of $48.37 billion. On Monday, those holdings were valued at $56.6 billion, 17% higher than what Strategy paid for them.

Bitcoin’s price kept falling after clawing back losses over the weekend. Over the past 24 hours, Bitcoin has fallen 0.4% to $87,119, according to CoinDesk.

Strategy earned its reputation as the world’s largest corporate holder of the cryptocurrency through its steady purchases since establishing a Bitcoin treasury in 2020.

However, the rapid decline in the price of Bitcoin over the past few weeks put its next move in the spotlight. At the start of each week, the company typically releases a securities filing showing how many tokens its purchased in the preceding seven days.

Saylor has been unflaggingly bullish, even as Bitcoin’s decline stuns investors. The crypto surged past $100,000 in December 2024, on the expectation that the incoming administration would create a friendly regulatory environment and beckon in a so-called crypto golden age.

However, the latest price movements show good things must come to an end. Bitcoin has slumped this month as investors unload risk-on assets amid concerns about stretched artificial-intelligence valuations.

On Nov. 4, the price plunged below the $100,000 mark for the first time since May. Bitcoin traded as low as $86,010 on Nov. 20, down 32% from the all-time high of $126,272 it reached in early October.

Saylor indicated in a social media post Friday that Strategy might be buying the dip. “Endure,” he wrote, in his usual cryptic fashion. Saylor has continually urged investors to “HODL,” or hold on for dear life, an initialism reminding Bitcoin fans to cling to their digital assets for the long term.

He appeared to double down just days later. “I won’t back down,” Saylor posted on Nov. 23. The letter “B,” in this case, was the Bitcoin symbol.

Strategy’s silence on Monday could be a sign uncertainty is starting to set in. The last time Strategy paused its Bitcoin purchases was in the period from Sept. 29 to Oct. 5.

Even without the latest volatility in the market, the company has faced pressure. Investors are concerned about Strategy’s ability to service its preferred dividends and debt interest costs, considering it has little income to make those payments.

S&P Global assigned Strategy a B- issuer credit rating with stable outlook in October. The company’s weak risk-adjusted capitalization and low U.S. dollar liquidity are offset in part by its access to capital markets and “prudent management of its capital structure,” the agency wrote.

Concerns over Strategy’s possible removal from the MSCI indexes have weighed on shares as well. The debate centers on whether Strategy is an operating company or a passive asset holder. Many regard it as a leveraged investment vehicle offering exposure to Bitcoin, though it does bring in some money from its software business.

At last check, Strategy’s mNAV stood at 1.16, according to the company website. Short seller Jim Chanos said earlier this month that he expected the metric to fall to 1, which would indicate the market values Strategy stock at the same price as its underlying Bitcoin holdings after accounting for debt.

Strategy’s STRK, STRC, STRD, and STRF preferred stocks were trading higher Monday. STRF gained the most, rising 4.1%.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com