Because the price of Bitcoin is still below its average purchase cost, Strategy has an unrealized loss of almost $6.5 billion on its assets. The business is the biggest corporate Bitcoin owner, with 713,502 BTC.
Recently, Bitcoin was trading close to $67,000, around 12% less than Strategy’s average acquisition price of $76,052. The decline caused MSTR shares to plunge 13% in a single day, the biggest one-day decline the firm has seen in almost a year.
The fact that Strategy is still trading at a little premium to its net asset value in spite of the decline indicates that investors still value its long-term Bitcoin strategy. Future equity issues without instant dilution are made possible by this premium.
STRC, the company’s permanent preferred equity instrument, traded below par, increasing the potential for a larger dividend payment in the event that prices do not rebound. Declines were also observed in comparable products from competitors.
As Bitcoin continues to trade below Strategy’s cost basis, investors are now anticipating the company’s earnings call, where management’s outlook will be the main focus.
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