Michael Saylor's Strategy said it bought $10.7 million of Bitcoin

By Dave Liedtka | BloombergMichael Saylor's Strategy said it bought $10.7 million of Bitcoin, a week after unveiling plans to issue up to $21 billion of preferred stock

Michael Saylor’s Strategy said it bought $10.7 million of Bitcoin last week, a week after unveiling plans to issue up to $21 billion of preferred stock to acquire more of the cryptocurrency.

The enterprise software company and leveraged Bitcoin proxy is being closely watched by hedge funds for any move to sell more common shares after flooding the market with them in a prior fundraising round. It’s also planning to issue up to $2 billion of convertible preferred stock and $1 billion of common shares.

The company, which is controlled by co-founder and chairman Saylor, has been buying Bitcoin on a frequent basis since late October. The former MicroStrategy unit purchased 130 Bitcoin at an average price of approximately $82,981 from March 10 through March 16, according to a filing with the US Securities and Exchange Commission on Monday. It now holds about $41.6 billion of Bitcoin.

The preferred stock sale would add a lever for the company as it seeks to secure $42 billion over the next few years by selling securities to buy Bitcoin — with an increasing focus on its ability to sell fixed-income securities after flooding the market with common shares. The company later shifted to using equity and share sales to fund the purchases.

Strategy unveiled in October to plan to raise $42 billion of capital through 2027 to fund Bitcoin purchases using at-the-market stock sales and fixed-income securities.

“This is kind of a historic entry point because all of the risk has been stripped off the asset,” Saylor said on a panel at a Miami Beach, Florida, conference on Monday. “You pretty much know Wall Street’s going to embrace it, the US government is going to embrace it, banks in the US are going to embrace, which means that all the other banks will embrace it.”

Shares of Strategy have surged about 2,300% since Saylor began investing the company’s cash into Bitcoin as a hedge against inflation in 2020. Bitcoin is up over 600% during the same period.

The company’s stock price gains have also been fueled in part by demand for the trades from hedge funds, who are making a volatility play on Strategy’s shares and bonds. The trades involve buying the company’s bonds and selling its shares short, a strategy that pays off as long as the stock moves significantly in either direction.

Strategy shares were down around 3.7% to $286.52 on Monday, and are little changed so far this year. Bitcoin has dropped about 11% since December.

“The market is really skittish based upon concerns about tariffs, the disposition of the US economy,” Saylor said. “We’re in this macro risk-off zone. When that flips, I think Bitcoin will rip forward with a vengeance.”

–With assistance from Vildana Hajric.

(Adds comment from Saylor in the fifth paragraph.)