Bitcoin News Today: Investors Ditch MSTR as Analysts Warn of Dilution and Bitcoin's Volatility Trap

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MicroStrategy, now rebranded as Strategy (MSTR), continues to face scrutiny over its aggressive Bitcoin accumulation strategy, which has been funded through a mix of equity dilution, preferred share offerings, and debt financing. Analyst Nikolaos Sismanis has recently advised investors to “step off” the MSTR equity rollercoaster, citing concerns over the scale and execution risk of the company’s unconventional capital-raising methods. Sismanis highlighted that Strategy has issued a range of preferred shares—including STRK, STRF, STRD, and STRC—designed to attract different investor profiles, each offering varying degrees of yield and Bitcoin exposure. STRK, for instance, offers an 8% yield with conversion rights, while STRF provides a 10% yield fully backed by Bitcoin. STRD offers similar yields but with less Bitcoin backing, and STRC is structured to compete with money market alternatives with a 9% monthly payout [1].

The company’s primary source of capital for Bitcoin purchases, however, has remained the issuance of new common stock. This strategy, while allowing Strategy to expand its Bitcoin holdings, has raised concerns about shareholder dilution. The company had previously pledged to avoid issuing new shares when its stock price significantly exceeded its Bitcoin net asset value (mNAV), a commitment that has drawn criticism from investors and analysts. Prominent investors like Jim Chanos have repeatedly argued that purchasing Bitcoin directly is a more efficient alternative to investing in MSTR, given the stock's premium over its underlying Bitcoin value. This sentiment is echoed by some shareholders who have exited their positions, including Josh Mandell, who sold his MSTR stake entirely [1].

Supporters of the Strategy approach, including Sismanis, argue that the flexibility afforded by the current capital structure allows the company to purchase Bitcoin during dips, effectively increasing the Bitcoin per share as long as the stock remains above its book value. However, this strategy carries inherent risks. If the stock’s premium (mNAV) drops below 1.0, the company would be forced to either sell Bitcoin or issue shares at a loss—both of which would contradict its stated “only accumulate” strategy. This could also raise questions about the rationale for investing in MSTR rather than Bitcoin directly, a concern that Chanos has consistently raised [1].

Despite the criticisms, Strategy has demonstrated strong financial performance in Q2 2025, with $14 billion in operating income and $10 billion in net income reported. The company's revenue from subscription services increased by 70%, driven by new accounting standards and significant unrealized gains from its Bitcoin holdings. This performance has led to the company being considered for inclusion in the S&P 500 index during the September 2025 rebalance, a move that could further boost its market visibility and investor appeal [2].

Sismanis has shifted his focus from direct stock ownership to options strategies, taking advantage of the stock’s volatility and fat premiums. He sold a September 2026 put option at $310 with a premium of $61.80 per share, effectively locking in a purchase price of $248 per share if assigned. While still bullish on the company’s long-term potential, Sismanis has chosen to express his position through a more diversified approach, citing improved margin of safety and potential returns in the context of high volatility [1].

At press time, MSTR was trading at $335.65, a 1.75% decline over the past 24 hours. The company’s continued reliance on Bitcoin as a strategic asset, while controversial, remains central to its corporate identity and long-term vision under Michael Saylor’s leadership. As the debate between dilution, debt, and Bitcoin accumulation continues, investors remain divided on whether the risks justify the potential rewards.

Source:

[1] Another analyst wants to 'step off' MicroStrategy's ... (https://www.thestreet.com/crypto/investing/another-analyst-wants-to-dump-microstrategy-entirely)

[2] MicroStrategy (MSTR) Qualifies for S&P 500, Inclusion ... (https://www.reddit.com/r/CryptoCurrency/comments/1n6mht8/microstrategy_mstr_qualifies_for_sp_500_inclusion/)