Recent developments surrounding Strategy have sparked intense discussions within the investment community, particularly following the company’s recent stock issuance aimed at acquiring more Bitcoin. Concerns are escalating over shareholder dilution and the strategic direction of funding initiatives undertaken by the firm.
Strategy’s Evolving Funding Approach
Reports indicate that Strategy shifted its operational guidance on August 18, leading to a significant and rapid stock issuance shortly thereafter. This change has raised eyebrows and prompted inquiry from analysts.
CryptoQuant analyst JA Maartunn highlighted a pattern in the financing approach: prior to the August guidance change, little to no new capital flowed into the company. However, within a week of the shift, the company raised approximately $360 million, dramatically increasing its financial leverage.
This swift surge in capital has been met with caution from observers who suggest that the firm may increasingly rely on stock sales to bolster its Bitcoin position, potentially undermining shareholder value.
The newly implemented rules dictate stock sales based on metrics known as market net asset value, or mNAV, which helps assess the relative value of the company’s shares compared to its Bitcoin assets.
Is Strategy losing momentum?
Leading up to Aug 18, investment in $MSTR was notably low:
Aug 3: $0
Aug 17: ~$51M
Yet, post-policy shift, a total of $359M was raised through new share issues, raising concerns about the strategic shift.
Timeline of policy adjustments… pic.twitter.com/pORoidxPhf
— Maartunn (@JA_Maartun) August 26, 2025
The company’s strategy indicates that if stock trades exceed four times its mNAV, significant share issuance will occur for Bitcoin purchases. Conversely, if trading falls between 2.5 to four times, shares will be issued more cautiously. Should the stock drop below 2.5 times, the focus may shift towards debt repayments or dividends rather than asset accumulation.
Notably, should shares decline under a 1x mNAV, the company may resort to borrowing to facilitate stock buybacks. This complex framework constitutes a departure from previous promises not to engage in share sales for Bitcoin purchases when trading below 2.5 times mNAV — a pivotal alteration called out by critics.
Financing Mechanisms for Acquisition
As indicated in the company’s SEC filing, approximately $310 million originated from at-the-market common stock sales, with an average share price pegged at $354, alongside around $47 million from preferred share issuances.
Overall, Strategy raised just over $357 million to acquire 3,081 Bitcoin, thereby boosting its total holdings to an impressive 632,457 BTC.
This cumulative total represents about 3% of the total Bitcoin circulating supply, as reported in various market analyses. The firm aims to ultimately reach a target of 1 million coins, bringing its current accumulation to around 60% of that goal.
Addressing Dilution and Financial Resilience
Investors expressing concern about dilution have valid reasons for their apprehensions. With each new stock issue, existing shares encounter increased shares of Bitcoin across the pool, diminishing the backing per share for current stakeholders.
Current assessments place Strategy’s debt at approximately 20% of Bitcoin NAV, allowing for potential borrowing capacity up to 30%. However, opting for additional equity issuance at diminished mNAV levels remains a risk that can undermine per-share economic benefits.
Featured image by Meta, analytics chart from TradingView
