how did they sneak that one past the editors at FT?!

"It’s no exaggeration to say that Strategy is not merely a major player but the market itself — a blue whale consuming all the available krill in the bitcoin ocean."

Saylor’s brilliance does not necessarily lie in investment acumen but in his ability to elevate Strategy’s share price — up over twentyfold since its pivot to bitcoin in August 2020. This has enabled insiders to cash in massively, with senior executives unloading $568mn of stock in 2024, including a flurry of sales by Saylor’s lieutenants near the peak in November. 

Strategy’s legacy software business does not generate cash. Servicing the high dividend on STRK will require further financial engineering, most likely through additional equity issuance. This will inevitably lead to dilution for existing common stockholders. STRK, in effect, functions as a perpetual payment-in-kind instrument, combined with an out-of-the-money call option — an elegantly convoluted mechanism primed for significant dilution.

The broader question remains whether Strategy’s relentless fundraising to buy bitcoin is a masterstroke or a reckless gamble. The $1,000 per share conversion price for STRK represents a wager on bitcoin’s continued ascent. If bitcoin soars, all stakeholders benefit. If it stagnates or declines, the dilution from STRK and other equity issuances will weigh heavily on common shareholders, who are already being pushed further down the capital structure.

"For now, Strategy’s financial wizardry is working,"

• stock continued premium to NAV
• bitcoin continued appreciation.

Saylor’s X post sums up Strategy’s strategy: strike the iron while it’s hot. The question is whether management’s hyper-opportunism belies the confidence they so often profess.