Expanding Bitcoin Reserves with a Strategic Acquisition
Strategy Inc., formerly MicroStrategy, has strengthened its Bitcoin holdings by purchasing an additional 20,356 bitcoins for approximately $1.99 billion. This acquisition, executed between February 18 and February 23, 2025, came at an average price of $97,514 per bitcoin. The purchase was funded through a $2 billion private offering of zero-coupon convertible senior notes due in 2030, which carried a 35% conversion premium over the company’s Class A common stock price. After deducting expenses, the net proceeds from the offering totaled approximately $1.99 billion, earmarked primarily for Bitcoin acquisitions.
Bitcoin Accumulation Strategy and Financial Performance
With this latest investment, Strategy Inc. now holds approximately 499,096 bitcoins, acquired at a cumulative cost of $33.1 billion, averaging $66,357 per bitcoin. The company’s aggressive accumulation aligns with its “21/21 Plan,” which aims to raise $42 billion over three years through equity and fixed-income instruments to continue its Bitcoin purchases.
However, despite its growing Bitcoin reserves, Strategy Inc. has faced financial hurdles. In Q4 2024, the company reported a net loss of $670.8 million, or $3.03 per share, surpassing analyst expectations of a modest profit. Revenue for the quarter fell 3% to $120.7 million. Additionally, the company implemented a 20% workforce reduction, affecting departments such as research and development, consulting, and sales and marketing.
Market Response and Stock Performance
Market sentiment regarding Strategy Inc.’s Bitcoin-centric strategy remains mixed. Over the past year, the company’s stock exhibited significant volatility, reflected in its high beta of 3.26, but also delivered an impressive 335.95% return. However, recent performance has been less favorable—over the past three months, the stock has declined by 13.3%, even as Bitcoin’s price rose by 4% and the S&P 500 index gained 3.7%.
As of February 24, 2025, Strategy Inc.’s stock is trading at $299.69, marking a decline of $24.12 from the previous close. The company’s market capitalization currently stands at approximately $76 billion.
Strategy Inc.’s unwavering commitment to Bitcoin highlights its strong belief in the cryptocurrency’s long-term value. While this strategy has significantly expanded its digital asset holdings, it also presents financial and operational challenges that the company must continue to manage.
