Michael Saylor's Strategic Pivot: Limiting Stock Sales for Bitcoin Buys

Michael Saylor, the executive chairman of MicroStrategy (now known as Strategy), is adjusting his long-term Bitcoin acquisition strategy by moving away from common stock sales as a primary funding method. While the company has historically used at-the-market (ATM) equity programs to raise capital for its Bitcoin purchases, recent reports indicate a shift towards an "unorthodox financing instrument" known as perpetual preferred stock. This change is part of a broader plan to build a "BTC Credit Model," which aims to fund a massive Bitcoin treasury without heavily diluting common shareholders.

The "BTC Credit Model" and Perpetual Preferred Stock

The new financing approach involves issuing perpetual preferred stock, a security that never matures and allows the company to skip dividend payments if needed. Saylor's vision is to raise tens of billions of dollars to acquire more Bitcoin while reducing reliance on common stock sales and convertible bonds. According to a Bloomberg report, Saylor believes this model could theoretically raise "$100 billion even $200 billion" over the coming years. By using this instrument, MicroStrategy can continue its aggressive Bitcoin accumulation while providing more stability for its core stock.

The move is a bold one, as the strategy relies on Bitcoin's value to back a perpetual income stream. The company's ability to maintain this model will depend on sustained investor demand and a rising Bitcoin price. This pivot away from traditional funding methods highlights Saylor's unwavering conviction in Bitcoin's long-term value and his firm's commitment to becoming a dominant player in the corporate Bitcoin treasury space.