Summary
- Strategy has reportedly eased its funding criteria for Bitcoin (BTC) accumulation, putting its investment strategy to the test.
- The company has relaxed share issuance criteria and stated that due to a reduction in share price premium, it is seeking non-dilutive fundraising options such as convertible bonds and preferred shares.
- However, it was pointed out that while this method can avoid share dilution, it may increase liquidity pressure due to high interest and dividend payments.
On the 18th (local time), Bloomberg reported that Strategy has eased its funding criteria for Bitcoin (BTC) purchases, putting the company's Bitcoin investment strategy to the test.
According to the media outlet, Michael Saylor, founder of Strategy, stated last month, "If our share price trades at 2.5 times or lower compared to the net asset value (NAV) of our Bitcoin holdings, we will refrain from issuing new shares." However, he recently revised internal policies to allow for share issuance at even lower prices.
The report analyzed this as "a signal that the perpetual preferred stock-based funding strategy is falling short of market expectations," adding, "Recently, Strategy's pace of Bitcoin accumulation has also slowed."
It further noted, "While Strategy's share price has fallen 22% from its peak in November last year, Bitcoin rose 23% in the same period," and stated, "As the mNAV indicator, which reflects the net asset value premium of the share price over Bitcoin, has narrowed, the company is seeking funding alternatives such as convertible bonds and preferred shares that do not dilute equity value."
However, the outlet pointed out, "Although this approach can avoid share dilution, it could increase liquidity pressure due to high interest and dividend payments."
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
