Bitcoin prices fell, and Michael Saylor responded by issuing a torrent of new shares unprecedented for a large-cap U.S. company. The dilution has kept his Bitcoin stash growing, but it has also exposed shareholders to increased risk. By the end of Q2 2020, Strategy had 76 million Class A shares outstanding, rising to 314 million by February 12.
Strategy pioneered a model based on increasing Bitcoin per share (BPS). This accretion came from selling shares at inflated prices and using the proceeds to buy more Bitcoin, effectively raising Bitcoin per share for investors. From the end of 2023 until mid-July of last year, Strategy shares jumped more than seven-fold, three times the Bitcoin climb, with Saylor able to buy about 1.5 Bitcoin per 1000 shares at the start and about 3.8 Bitcoin per 1000 shares at the peak.
Since the apex, Strategy shares have fallen 72 percent, and the accretion game no longer works. To offset the drag, Saylor shifted to issuing large quantities of preferred stock, becoming the largest issuer of preferreds in 2025 and raising about $7 billion. The debt burden now sits at about $8.2 billion, with the preferred stock yielding over 10 percent in dividends, and refinancing about $6 billion in 2028 would likely require issuing more equity.
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