Michael Saylor revealed on Aug. 18 that Strategy (formerly MicroStrategy) has revised its stock issuance policy amid the financial instrument’s current downward trend.
The company had previously limited stock sales below 2.5x market-to-net asset value (mNAV) strictly to cover debt interest or preferred share dividends. Under the new rules, the firm can now issue stock below this threshold whenever it deems it strategically beneficial.
mNAV measures how the market values the company relative to its assets, including Bitcoin holdings and operational resources. The prior limit was meant to protect shareholders from dilution.
However, by relaxing this restriction, Strategy gains more flexibility to raise capital or accelerate Bitcoin acquisitions, signaling a willingness to act opportunistically in a volatile market.
Meanwhile, the update comes as MSTR shares have declined roughly 15% over the past month, closing at $363.6, their lowest level since April, according to Yahoo Finance data.
As a result, Strategy Tracker data shows the company’s NAV premium is now just 1.59, the narrowest gap between market price and Bitcoin-equivalent net assets this year.
Nonetheless, Strategy remains the world’s largest corporate Bitcoin holder, with 629,376 BTC worth around $72 billion as of press time.
Investors reaction vary
Strategy’s policy shift has drawn mixed reactions from investors in the firm.
James Chanos, a famous short seller who has taken a position against the Saylor-led firm, criticized the change, claiming it weakens protections against shareholder dilution and signals limited demand for the company’s preferred shares.
Meanwhile, other market experts see the adjustment as a tactical move that would help Strategy acquire more Bitcoin.
Cern Basher, chief investment officer at Brilliant Advice, noted that as long as mNAV stays above 1.0, issuing new equity can increase Bitcoin per share, benefiting existing shareholders.
According to Basher:
“If Strategy is now able to issue new equity at mNAVs all the way down to 1.0, they effectively have two methods (issuing preferred stock & common stock) to acquire more Bitcoin (each one helping the other). Think of it as having two separate faucets to fill up a bathtub – allowing you to fill up the tub faster.”
However, he noted that while “Strategy runs a risk of acquiring too much Bitcoin too fast,” the company’s shareholders should want it to become the world’s financial fortress quickly because this would open them up to more market opportunities.
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