Why I'm Never Buying Strategy Stock

Core Insights - Strategy has adopted an aggressive internal treasury policy, utilizing all accessible funds to purchase Bitcoin, resulting in a stock price increase of over 1,000% since its first purchase on August 11, 2020 [1][4]. Company Financials - Currently, Strategy owns approximately 650,000 Bitcoins valued at around $55 billion, having invested over $48 billion to acquire this amount, primarily funded by investors rather than operational income [4]. - The company has raised capital through various methods, including traditional debt, convertible notes, and issuing new classes of shares, indicating a reliance on investor funds [5]. Market Position and Strategy - Despite current success, the company faces potential challenges in a bear market, as evidenced by the creation of a $1.4 billion cash reserve fund to maintain dividend payments for at least two years, suggesting management anticipates difficulties in future funding [6][7]. - Strategy has opted not to sell Bitcoin to bolster cash reserves, instead choosing to issue more shares, which leads to shareholder dilution [8]. Shareholder Impact - The company's strategy prioritizes Bitcoin acquisition and repayment to institutional investors, indicating a likelihood of continued shareholder dilution as it funds cash reserves [9].