Michael Saylor revealed on August 18 that the Strategy (previously MicroStrategy) revised its stock issuance policy amid the current downward trend in financial instruments.
The company previously strictly limits stock sales from stocks with less than 2.5 times the net asset value (MNAV) from stocks, strictly limiting them to cover debt interest or preferred stock dividends. Under the new rules, companies can now issue shares below this threshold whenever they deem strategically beneficial.
MNAV measures how the market rates a company compared to assets, including its Bitcoin holdings and operating resources. Previous restrictions were intended to protect shareholders from dilution.
However, by easing this limit, the strategy has given you more flexibility to raise capital or accelerate your acquisition of Bitcoin, indicating your willingness to act opportunistically in unstable markets.
Meanwhile, the update will be made as MSTR stocks fell by about 15% in the past month, closing at its lowest level since April, according to data from Yahoo Finance.
As a result, Strategy Tracker data shows that the company’s NAV premium is 1.59, the narrowest gap between this year’s market price and Bitcoin-equivalent net worth.
Nevertheless, the strategy remains the world’s largest corporate Bitcoin holder, with 629,376 BTC worth roughly $72 billion in reporting time.
Investor reactions vary
Policy changes in strategy elicited mixed responses from corporate investors.
James Chanos, a well-known shortseller who has acquired a position against the Saylor-led company, criticised the change, claiming it weakens protection against shareholder dilution and limited demand for the company’s preferred stock.
Meanwhile, experts in other markets view this adjustment as a tactical move that will help the strategy win more Bitcoin.
Cern Basher, chief investment officer of Brilliant Advice, noted that as long as MNAV is above 1.0, issuing new shares will increase Bitcoin per share, bringing benefits to existing shareholders.
According to Basher:
“If the strategy is made available to issue new shares all the way up to 1.0 on MNAVS, they have two effective ways (issuing preferred shares and common shares) (each helping each other). Think of it as two separate faucets to fill the tub – it can fill the tub faster. ”
However, he said, “The strategy risks getting Bitcoin too quickly.” Shareholders should hope that it will quickly become the world’s financial fortress, as it opens them up to more market opportunities.
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