Strategy (MSTR) has halted Bitcoin purchases for a full month, opting instead to boost its cash reserves to $3.2 billion. The company currently holds 843,775 Bitcoins valued at $58 billion, but recent disclosures reveal that $22 billion of this is pledged to creditors, leaving $36 billion as net reserves for shareholders.
CEO Michael Saylor emphasized the need for updated financial metrics to reflect Bitcoin’s unique market, stating, “Bitcoin Capital Markets require a new financial language.” The firm’s use amplifies both profits and losses. Over the past year, MSTR shares dropped 77%, while Bitcoin itself fell 45%.
During the buying freeze, Strategy has focused on issuing equity to raise capital, likely seeking to strengthen its position amid market volatility. The company faces roughly $1.8 billion annually in debt service and preferred dividends, so holding ample cash buffers against further crypto downturns.
This pause raises questions about the sustainability of MSTR’s core model, which depends on raising funds to purchase Bitcoin and grow holdings. The market slump means new stock issuances could dilute existing shareholders more than before, complicating growth plans.
MSTR shares saw a modest 1.7% uptick in early trading after the disclosure, though they remain down over 6% for the day, trading near $93.95. Wall Street analyst consensus stays bullish, with 14 experts rating the stock a strong buy and an average target price of $275.46.
