MicroStrategy disclosed its latest Bitcoin purchase on January 26. In its fourth purchase of the month, the company acquired Bitcoin for 264.1 million dollars at an average price of 90,061 dollars per BTC.
The acquisition brings the company's average Bitcoin acquisition cost up to 76,037 dollars. The purchase occurred while Bitcoin was trading in an unstable January range, falling from the month's early peaks above 95,000 dollars to the range in the high 80,000 dollars.
Latest purchase: details and financing structure
While the large purchase underscores MicroStrategy's long-term belief in Bitcoin, underlying data indicates that the company's financing model is experiencing increasing structural pressure.
MicroStrategy financed the period from January 20 to 25 primarily through share issuance.
The company sold 1,569,770 common shares, which generated 257.0 million dollars in net proceeds, as well as 70,201 shares of STRC preferred stock, which brought in an additional 7.0 million dollars.
Total revenues of 264.0 million dollars correspond almost to the reported Bitcoin investment price.
Simply put: Strategy paid for the purchase by issuing new shares – not with profits from operations or cash from the treasury.
Most of the money came from the sale of common shares, while a smaller portion was raised through preferred shares.
Together, the two sales covered the entire cost of the Bitcoin purchase. The company is therefore still dependent on capital markets to finance its accumulation.
MicroStrategy's key structural measure is the ratio of share price to intrinsic value (mNAV), which shows how the company's stock is trading relative to the value of its Bitcoin holdings per share.
Currently, as of January 26, MicroStrategy's diluted mNAV is approximately 0.94x, meaning the stock is trading at a 6% discount relative to the Bitcoins backing each share.
This matters because MicroStrategy's strategy relies on share issuances above intrinsic value. When the stock trades at a discount, new issuances risk diluting – rather than creating – value for shareholders.
Historically, MicroStrategy has defended new share issuances by increasing Bitcoin per diluted share. That effect is now fading.
According to the company's own numbers:
On January 5, MicroStrategy held 673,783 BTC and 345.6 million diluted shares – or 0.001949 BTC per share.
On January 26, the holding had grown to 712,647 BTC, but the number of diluted shares had increased to 364.2 million, corresponding to 0.001957 BTC per share.
It corresponds to an increase of only 0.38% over the month.
Even more importantly: From January 20 to January 26, the amount of Bitcoin behind each share changed almost not at all.
It shows that the latest share issuances no longer significantly increase Bitcoin exposure for shareholders
Bitcoin per diluted share over time
Rising dilution is no longer offset by btc growth
Dilution is accelerating. From January 5 to January 26:
The diluted share count increased by 5.36%.
The Bitcoin holding grew by 5.77%.
Although the holding still grew a tad more than the dilution over the month, the difference became much smaller over the past week. This dilution follows the decline in mNAV and suggests that the model is losing its effectiveness.
If the stock price remains below intrinsic value, further share issuances will mathematically reduce Bitcoin exposure per share.
Dependence on the capital market is growing, not declining
The company's Bitcoin strategy is entirely dependent on access to capital markets.
In the last 19 months, the company has raised an estimated 18.56 billion dollars through the issuance of common stock and has issued approximately 226.6 million shares. The latest purchase continues this trend and results in further dilution at a time when market conditions are weakened.
At the same time, the company is becoming more reliant on preferred shares, which entail fixed demands that are prioritized over common shareholders.
Although preferred shares can sustain Bitcoin purchases under weak stock markets, they increase long-term obligations and make the balance sheet more complex.
MicroStrategy's latest Bitcoin purchase is not problematic due to size or timing. The concern is about structure, not belief.
With mNAV now below 1.0x, Bitcoin price per share increase close to zero, rising dilution, and increased dependence on capital markets, the company's core business faces greater constraints than in recent years.
Unless there is again a premium for shares, further Bitcoin accumulation risks becoming dilutive instead of value-enhancing.
Such a transition would fundamentally change the risk profile for shareholders, even if the Bitcoin price comes back.
Currently, the data show that MicroStrategy can still buy Bitcoin. The question is whether they can continue without diluting shareholder value.
