Strategy continued to buy up falling bitcoin. Its shares fell in value

The largest public holder of bitcoin - the company founded by Michael Saylor Strategy has purchased bitcoins for almost $1 billion, according to reports filed with the U.S. Securities and Exchange Commission (SEC). Strategy bought bitcoins for a similar amount for the second week in a row, Bloomberg notes.

Strategy (formerly called MicroStrategy) bought $980.3 million worth of bitcoins between Dec. 8 and Dec. 14, the largest token purchase for the company since July, and the second straight week that Strategy added more than 10,000 tokens to its portfolio - the first time that's happened since January, Bloomberg points out.

Most of Strategy's new acquisitions in the past two weeks were funded by selling Class A common stock at market price. Critics of Saylor's model of converting cash from the sale of securities into bitcoin note that such offerings dilute shareholder interest and reduce the premium to bitcoin reserves that used to make Strategy's stock markedly overvalued, Bloomberg explains. In addition, the company also raised funds through the sale of perpetual preferred stock in three of its four classes. The premium on Strategy's common stock over its enterprise value is now about 1.1, the agency notes.

Investors reacted to the news by selling off Strategy's securities: they fell 6.7% in trading on December 15, to $164.3. Bitcoin fell 2.7% overnight to $86,400, down about 31% from its high of $126,000 reached in October.

Late last week, Reuters wrote that Strategy could be excluded from the NASDAQ-100 because the company's debt-free model of buying cryptocurrency - through bond issuance and stock offerings - is more akin to an investment fund. But despite recent speculation about Strategy's possible exclusion from stock indexes, the NASDAQ-100 decided on Friday evening, Dec. 12, to keep Strategy in the index after its annual review.

Last week, Strategy sent a letter to the Morgan Stanley Capital International (MSCI) Index Committee, which manages the MSCI World, MSCI Emerging Markets, and MSCI ACWI indices, among others, urging them to reject a proposal to exclude companies with more than 50% of their assets in cryptocurrency from global indices. In the letter, Strategy warned of "profoundly disruptive consequences" if the initiative is adopted. MSCI's decision is expected by January 15.

This article was AI-translated and verified by a human editor