Stock prices fell to April lows! Strategy relaxes MSTR stock issuance restrictions, accelerating Bitcoin acquisition

Michael Saylor, the founder of Strategy (formerly MicroStrategy), announced on August 18 that the company has adjusted its stock issuance policy to allow for new shares to be issued when the market net asset value (mNAV) is below 2.5 times. This move breaks the previous restriction of issuing shares only under specific financial needs, providing greater flexibility for the company to raise funds and accelerate its Bitcoin (BTC) acquisition amid the current sluggish stock price.

Policy Adjustment: From Defense to Flexible Use

Previously, Strategy strictly limited stock issuance, only initiating it when mNAV was above 2.5 times and used for paying debt interest or preferred stock dividends. The new rules allow companies to issue new shares even if mNAV is below that threshold when they believe it has strategic value.

mNAV is an indicator that measures a company's market value relative to its net asset value (including Bitcoin holdings and operational resources). Easing restrictions means that the Strategy can raise funds more flexibly during market fluctuations, seizing opportunities to acquire BTC at lower prices.

Stock Price and Valuation Pressure

According to Yahoo Finance data, MSTR's stock price has fallen about 15% in the past month, closing at $363.6, hitting a new low since April. The Strategy Tracker shows that the company's net asset value premium has fallen to 1.59, the narrowest gap this year between market prices and Bitcoin-equivalent assets.

Despite this, Strategy remains the largest corporate Bitcoin holder in the world, holding 629,376 BTC as of the time of writing, with a market value of approximately 72 billion USD.

Divergence of Investor Perspectives

This policy change has sparked different reactions in the market:

Critics: Noted short seller James Chanos believes that relaxing restrictions has weakened protections against shareholder dilution and reflects a lack of demand for the company's preferred stock.

Supportive viewpoint: Cern Basher, Chief Investment Officer of Brilliant Advice, pointed out that as long as the mNAV remains above 1.0, the issuance of new shares can actually enhance the value of each Bitcoin, which is beneficial for shareholders in the long run.

Basher describes this strategy as "turning on two faucets at the same time to fill the bathtub," allowing the company to accumulate Bitcoin reserves more quickly, although there is also the risk of acquiring too quickly.

Strategic Intent: Accelerate to Become a "Bitcoin Financial Fortress"

Saylor has long viewed Bitcoin as a core asset of the company and has been continuously seeking to expand its holdings. This policy adjustment means that Strategy is willing to go against the trend in a sluggish market, using equity financing to accelerate the pace of BTC acquisition.

Market analysis suggests that if the BTC price rebounds in the coming quarters, this move could significantly enhance the company's asset value and market influence.

Conclusion

Strategy relaxed the issuance restrictions on MSTR stock as the stock price fell to April's low, demonstrating its offensive posture in a volatile market, with the goal of further expanding its Bitcoin reserves. While this move has sparked controversy over shareholder dilution, it could be an important step for investors who have confidence in BTC's long-term value toward the company's goal of becoming a "global Bitcoin financial fortress." For more MSTR and BTC market dynamics, please follow the Gate official platform.