Strategy Buys Just 130 More Bitcoin. Why Else the Stock Is Tumbling.

Strategy co-founder Michael Saylor. (DOMINIC GWINN/Middle East Images/AFP via Getty Images)

Key Points

• Strategy stock falls following a sharp decline in Bitcoin over 24 hours.
• The company adjusts its year-end Bitcoin price assumption to a range of $85,000 to $110,000 from $150,000.
• Strategy said it bought 130 tokens in the period from Nov. 17 through Sunday.

After going a week without buying Bitcoin, Strategy made another purchase. The stock fell anyway.

In a securities filing Monday, the world’s largest corporate holder of Bitcoin disclosed that it had bought just 130 tokens in the nearly two-week period from Nov. 17 to Nov. 30.

The $11.7 million purchase brought Strategy’s total holdings to 650,000 Bitcoins, acquired for roughly $48.38 million in total. The horde was valued at $55.1 million as of early Monday.

Strategy didn’t issue an update to its holdings on Nov. 24, indicating it didn’t buy any Bitcoin in the prior seven-day period and marking the first time in about a month and a half that it had stayed on the sidelines.

As is customary, Strategy chairman and co-founder, Michael Saylor, teased an upcoming purchase announcement in a social media post Sunday, suggesting the company might “start adding green dots” to a graph representing its Bitcoin holdings.

The news didn’t do much to offset the stock’s continued losses. Shares fell 6.5% to $165.73 following a sudden reversal in the price of Bitcoin that wiped out all of last week’s gains. The short-lived rebound came as Wall Street piled back into risk-on assets including technology stocks.

The decline mirrored a drop in the price of Bitcoin, which has fallen 5.8% over the past 24 hours to $86,087, according to CoinDesk. Bitcoin’s losses accelerated once its price broke below $90,000, which many analysts view as a key support level.

There was more to Strategy’s latest filing than an update on its holdings. The company said it had established a $1.44 billion U.S. dollar reserve “to support the payment of dividends on its preferred stock and interest on its outstanding indebtedness.”

Investors have challenged Strategy’s ability to service its preferred dividends and debt interest costs, seeing as its Bitcoin holdings generate no income and its legacy software business yields little free cash.

The reserve was funded using proceeds from the sale of common stock under Strategy’s at-the-market offering program. The company said it aims to maintain a reserve “in an amount sufficient to fund at least twelve months of dividends,” and ultimately intends to cover 24 months or more.

Separately, Strategy updated its fiscal 2025 guidance to reflect recent market volatility. The company adjusted its year-end Bitcoin price assumption to a range of $85,000 to $110,000 from $150,000.

Based on this outlook, the company sees operating income in the range of a $7 billion loss to profit of $9.5 billion. Strategy sees diluted earnings between a loss of $17 a share to a gain of $19.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com and George Glover at george.glover@dowjones.com