Saylor bought 1,550 BTC, but it's Strategy's worst trade in recent times

Original Author: 100y

Original Translation: Chopper, Foresight News

Bitcoin treasury company Strategy first sold 32 BTC, then made a large purchase of 1,550 BTC.

I don't want to see Strategy (MSTR) fail, but someone has to speak the truth. In my view, this is an extremely bad trade.

On the surface, this maneuver looks quite impressive. Strategy bought the dip aggressively while simultaneously increasing its dollar reserve for paying preferred stock dividends from $900 million to $1 billion.

Does this signal a turnaround for Strategy?

If you only see the positives, it means you don't truly understand how this company operates.

First, Understand the Modified Net Asset Value (mNAV) Break-Even Point

Increasing Bitcoin Per Share (BPS) is one of Strategy's core objectives for creating value for MSTR shareholders.

The logic for increasing BPS is clear: issue common stock at a premium to the market price, then use all the proceeds to buy Bitcoin.

So, what level of premium does MSTR need to achieve to actually boost BPS through timely share issuance?

According to information disclosed in the Q1 2026 earnings call, the modified net asset value (mNAV) must be above 1.22, a value known in the industry as the break-even mNAV.

The underlying logic is simple: the funds raised by selling one share of MSTR must be sufficient to buy more Bitcoin than the current Bitcoin holdings per share. For the complete derivation, you can refer to my previous post. (https://research.4pillars.io/en/research/strategys-magic-number-122)

Ultimately, the break-even mNAV is calculated as follows:

A quick note: the break-even mNAV is no longer 1.22. Before this purchase of 1,550 BTC, estimates showed it had risen to 1.30.

Why This Is a Bad Trade

Let's revisit this acquisition of 1,550 BTC.

Strategy raised a total of $181 million through MSTR's at-the-market (ATM) offering, from which it used $101.3 million to purchase 1,550 BTC. This operation has two core issues:

First, the mNAV at the time of this MSTR ATM offering was below the break-even point of 1.30. Issuing shares and using the proceeds to buy Bitcoin when mNAV is below the break-even level does not increase BPS; instead, it causes the metric to decline.

Second, and more critically, not all funds raised from this offering were used to buy Bitcoin. The break-even mNAV calculation logic assumes 100% of the raised funds are used to purchase Bitcoin. Even if mNAV is high, if only a portion of the proceeds goes to Bitcoin, it will ultimately dilute BPS.

It is reported that the remaining funds from this offering, not used for buying Bitcoin, were allocated to the company's dollar reserve.

In other words, Strategy sacrificed MSTR shareholders' equity value and BPS to ensure the normal operation of its STRC business.

Estimates show that after this transaction, the company's BPS decreased by approximately 0.19% compared to before. And what did they gain in return? The company's dollar reserve runway only extended from roughly 6.3 months to 7 months.

Strategy's High-Stakes Gamble

Michael Saylor stated on the Q1 2026 earnings call: "Our core goal is to increase BPS, and we will do everything in our power to achieve this goal."

However, this transaction shows that Strategy sacrificed the core metric of MSTR's BPS for the sake of STRC's development. This is nothing short of a gamble.

If sacrificing MSTR leads to improved market sentiment, stabilization and recovery of the STRC token price, and a return of mNAV to a reasonable range, then the company can continue to raise funds through ATM offerings of both MSTR and STRC, keeping the whole system running smoothly.

But if market sentiment does not improve, the situation could deteriorate rapidly. Strategy might then be forced to continue sacrificing MSTR's interests just to stay afloat.

The worst-case scenario would follow: the company would either have to delay paying STRC dividends or gradually slide towards failure amidst constant internal friction.

Finally, I hope the prices of Bitcoin, MSTR, and STRC all recover.