Strategy Buys Almost $1 Billion Worth of Bitcoin. It’s Just What the Stock Needs.

MicroStrategy headquarters in Tysons Corner, Virginia. (Stefani Reynolds / Bloomberg)

Key Points

• Strategy acquired 10,624 Bitcoin tokens between Dec. 1 and Dec. 7 for $962.7 million, averaging $90,615 per token.
• The company’s total Bitcoin holdings now exceed $60.6 billion, following a period of reduced purchases in late November.
• Strategy financed the purchases mostly through the sale of shares under its at-the-market common stock facility.

Strategy , the world’s largest corporate holder of Bitcoin , snatched up nearly $1 billion worth of the cryptocurrency last week—a welcome sign for frustrated shareholders.

In a securities filing Monday, the company formerly known as MicroStrategy disclosed that it bought 10,624 tokens in the period from Dec. 1 to Dec. 7 at an average price of $90,615. The $962.7 million haul brings Strategy’s total Bitcoin holdings to more than $60.6 billion.

Strategy financed the purchases mostly through the sale of shares under its at-the-market common stock facility, the company reported.

Strategy stock was up 2.6% to $183.65 on Monday.

The purchases mark a turnaround from the previous two weeks. Strategy added just 130 tokens in the period from Nov. 17 to Nov. 30, opting to sit on the sidelines amid a dramatic pullback in Bitcoin. The flagship cryptocurrency was at $90,352 on Monday, down 28% from its October all-time high above $126,000.

The filing Monday indicates Strategy and its executive chairman, Michael Saylor, are now buying the dip, which may be good news for the struggling stock.

As of Friday’s close, Strategy shares have tumbled 61% from their July record high. Its so-called mNAV, the multiple the company trades at relative to its Bitcoin holdings, also has deteriorated.

But Strategy buying up Bitcoin signals the company is confident its purchases can expand that mNAV premium.

“MSTR’s model is to acquire Bitcoin when it is accretive to do so, irrespective of Bitcoin’s price,” wrote Cantor Fitzgerald analysts Brett Knoblauch and Gareth Gacetta in a research note last week, before the filing Monday. The firm reiterated an Overweight rating but cut its price target to $229 from $560.

The purchases also indicate Strategy remains bullish about the direction of Bitcoin itself. As investors have learned this year—for better or worse—wherever Bitcoin goes, Strategy stock goes with it.

“We expect believers in Bitcoin over the medium to longer term will welcome last week’s actions,” wrote TD Cowen analysts Lance Vitanza and Jonathan Navarette in a research note Monday.

Strategy issued the shares that financed the Bitcoin purchases at a relatively low premium by its standards, Vitanza and Navarette added, but the moves will look smart if Bitcoin soars to record highs.

TD Cowen reiterated a Buy rating and a $500 price target for Strategy shares.

Write to Nate Wolf at nate.wolf@barrons.com