Shares of Strategy Inc (NASDAQ:MSTR) edged higher in premarket trading on Monday, gaining 1.6% to $101.61, even as the company reported a decline in its Bitcoin-per-share metric. The move comes as investors weigh the firm's evolving balance sheet strategy, which increasingly resembles that of a credit manager rather than a pure Bitcoin accumulator.
According to preliminary estimates, Bitcoin per assumed diluted share fell 4.3% between June 30 and August 2. This decline nearly erased the 5% gain recorded in the second quarter. The drop was driven by a 3.98% increase in the diluted share count, to 417.268 million, while Bitcoin holdings slipped just 0.46% to 842,138 BTC. As a result, Bitcoin per diluted share fell to 201,822 satoshis from 210,824.
Strategy's most recent capital raise of $395.3 million was allocated almost entirely to reserves and preferred stock commitments. Of that total, $250 million (63.2%) was used to bolster dollar holdings, $81.2 million (20.5%) went to repurchase Stretch preferred stock (NASDAQ:STRC), and $52.4 million (13.3%) covered preferred dividends. Only $11.7 million (3.0%) was added to cash on hand. Notably, no funds were used to acquire additional Bitcoin.
The shift toward liquidity is evident in the balance sheet. Dollar reserves jumped 66.7% to $4.0 billion from $2.4 billion, while the company's Bitcoin holdings declined slightly. This trade-off—sacrificing some Bitcoin-per-share growth for enhanced financial flexibility—has become a central theme for the company.
With Bitcoin trading near $65,200, Strategy's current coin holdings are valued at approximately $54.9 billion, about $8.6 billion below their total acquisition cost of $63.51 billion. The company's dashboard reported an mNAV ratio of approximately 1.07, which reduces the premium available for accretive common-stock offerings.
In the most recent reported week, Strategy sold 3.01 million common shares, raising $290.6 million, and also disposed of 1,638 Bitcoin for $104.73 million. The combined proceeds were used for cash safeguarding and preferred securities. Preliminary estimates suggest the common shares fetched about $96.50 each after commissions, compared to Friday's closing price of $100.01.
The preferred stock buyback is expected to generate meaningful cost savings. Strategy acquired 912,143 Stretch shares for $81.2 million, at an average price of $89.02—11% below the stated value of $100 per share. With a 12% dividend rate, the move is projected to reduce annual payouts by nearly $10.9 million, representing an initial yield of about 13.5% on the buyback expenditure.
Chief Executive Phong Le described the buyback as “an attractive use of capital,” noting that it lowers future dividend obligations. The company's cash reserves now cover approximately 2.2 years of interest and preferred-dividend payments, up from 2.1 years previously, based on current spending rates.
The need for such safeguards was underscored in the second quarter, when Strategy posted a net loss of $8.22 billion, reflecting an $8.32 billion unrealized loss on digital assets. Preferred dividends also reduced income available to common shareholders by $400.7 million. Despite these headwinds, MSTR shares advanced 7.2% last week, outperforming both Bitcoin and major indices.
Looking ahead, investors will focus on upcoming inflation data, including July consumer prices on Wednesday and producer prices on Thursday, followed by retail sales on Friday. Weaker inflation could benefit Bitcoin and MSTR, while stronger readings may boost yields and pressure the trade. Wall Street remains bullish, with 19 Buy or Overweight ratings and two Holds, according to FactSet. The average price target stands at $234.88, implying roughly 135% upside from Friday's close.
