Michael Saylor has taken immediate advantage of his modified promise about diluting common shareholders with today’s massive increase in the supply of Strategy, formerly known as MicroStrategy (MSTR). This morning, he announced 875,301 more shares sold of MSTR under his at-the-market (ATM) offering.
Those sales would have been prohibited under slide 96 of the company’s original Q2 2025 earnings presentation. For a few weeks, the company stated unequivocally, “We will not issue MSTR below 2.5x mNAV except to pay interest and dividends.”
Fortunately for Saylor, that sentence was erased from the revised, August 18 version. The new promise allows Strategy the freedom to dilute shareholders in order to “provide greater flexibility in executing our capital markets strategy.”
What that vague revision means, in practice, is that the company was able to issue more MSTR below 2.5x mNAV today.
MSTR dilution to “provide greater flexibility”
According to a detailed July 31 explanation by company executives that they no longer stand behind, selling MSTR at a multiple-to-Net Asset Value (mNAV) between 1x and 2.5x is not an effective way to accrue bitcoin per share to shareholders on a dilution-adjusted basis for the long term.
Apparently, greater flexibility in executing their capital markets strategy is now more important. It certainly raised $309 million more dollars for the business to use.
Read more: MicroStrategy abandons MSTR dilution promise after mNAV drop
This morning, Saylor announced that dilutive offering as well as preferred share sales. Altogether, this round of dilution across the company’s various classes of securities allowed the company to purchase an additional $356.9 million worth of bitcoin (BTC).
Since one week ago, the price of MSTR is down 4.8%—slightly worse than the 3.2% decline in the price of BTC itself. Most investors derive the value of MSTR not from the company’s earnings but rather from its BTC holdings.
Going forward, Strategy has provided guidance that it will continue to dilute MSTR between a 1x and 2.5x mNAV “when otherwise deemed advantageous to the company.”
