- Strategy holds 597,325 BTC worth over $64 billion total
- Q2 reports $14.05B gain and $4.04B deferred tax bill
- $18.1B in MSTR stock still available for BTC purchases
Strategy, previously referred to as MicroStrategy, has paused its Bitcoin buying after a 12-week buying spree. The firm announced an unrealized Q2 profit of $14.05 billion on its BTC investments. In the meantime, the MSTR stock has fallen below the $404 mark during premarket trading.
Source: TradingView
MSTR stock is down, but is still up 39% in 2020 and 215% in the last 12 months. Bitcoin’s performance continues to support the Strategy’s main investment plan.
Strategy Pauses Bitcoin Purchases
Strategy, in its latest SEC filing, confirmed no Bitcoin purchases were made between June 30 and July 6. The firm also did not sell any shares during the same period, maintaining its BTC balance. It now holds 597,325 BTC acquired at $42.40 billion at an average price of $70,982 per coin.
This hiatus is the first break in the Strategy buying spree since early April. The last purchase involved 4,980 BTC worth $531.9 million between June 23 and June 29. The firm maintained its current reserve despite expectations for a new streak.
Michael Saylor, Strategy’s co-founder, posted an update on the company’s Bitcoin tracker before the disclosure. His message implied a temporary halt, although investors expected another purchase. Strategy later confirmed that no acquisitions were made in the week.
The digital assets of the firm have an unrealized gain of $64.36 billion as of June 30. The company, however, also had a deferred tax expense of $4.04 billion associated with this increase. Strategy’s deferred tax liability stands at $6.31 billion.
The Q2 pause follows a similar BTC purchasing break observed during Q1 results. In April, Strategy had reported $5.91 billion in unrealized losses on its holdings.
Also Read | Strategy Reports $5.91 Billion Unrealized Loss on Bitcoin Holdings
Strategy Equity and Preferred Stock Fund Bitcoin Accumulation
Strategy used proceeds from various equity and preferred stock programs to finance past BTC acquisitions. It increased $6.8 billion in Q2 through the sale of MSTR, STRK, STRF, and STRD stocks. These services continue to be the focus of its long-term acquisition model.
Strategy’s preferred stock comprises a STRD with a 10% fixed dividend and a convertible STRK stock with an 8% annual return. STRF is non-convertible and offers a 10% cumulative annual dividend. The instruments expand its capital base beyond common stock.
The upsized $84 billion capital plan, formerly known as the 42/42 capital strategy, still funds future BTC purchases. As of July 6, $18.1 billion in MSTR shares, $20.5 billion in STRK, and $1.9 billion in STRF are still available for issuance. This provides sufficient runway in future allocation.
Corporate Bitcoin Acquisition Spree
Other corporates are expanding Bitcoin treasuries, with Metaplanet now holding 15,555 BTC after a recent $239 million buy. Other companies such as GameStop, Trump Media, and Tether-backed Twenty One are also adopting Strategy’s acquisition model. This trend reflects the increased institutional demand in long-term exposure to BTC.
Also Read | GameStop Announces $2.25 Billion Notes for Future Investments, Growth