MSTR Stock Hits 4-Month Low as Issuance Threshold Eased
MSTR shares plunged to a four-month low after the company removed its 2.5× mNAV premium requirement for share issuance. The change allows MSTR to issue new shares even when its stock trades at about 1.55× bitcoin net asset value, raising dilution concerns among investors. Michael Saylor said this move enhances capital flexibility to buy additional bitcoin, supporting the firm’s bitcoin reserve strategy. MSTR holds over 629,000 BTC, valued at roughly $71.3 billion. Investors fear that frequent share issuance will dilute existing holdings and further depress the share issuance premium. Critics note similar sell-offs at peers MARA, COIN and RIOT, and an 8.6% pullback in bitcoin from its $124,000 peak has weighed on crypto-reserve models.
Bearish
Relaxing the share issuance threshold is bearish because it heightens dilution risk and undermines investor confidence in MSTR’s premium. Similar share-based dilution events at MARA, COIN and RIOT led to sustained stock sell-offs, while bitcoin’s 8.6% pullback has already pressured crypto-reserve models. In the short term, renewed dilution fears could trigger further selling; long term, MSTR must leverage its bitcoin purchases to offset dilution, which hinges on bitcoin price recovery and disciplined share issuance pacing.