Michael Saylor’s bitcoin stack is officially underwater, but here’s why he likely won't reach for the panic button

Core Viewpoint - The recent dip in Bitcoin prices to around $75,500 has temporarily placed Strategy's average purchase cost of Bitcoin at approximately $76,037 per coin, but this does not fundamentally alter the company's financial position or create balance sheet stress [1][2]. Group 1: Bitcoin Holdings and Debt Management - Strategy currently holds 712,647 Bitcoin, all unencumbered, meaning there is no risk of forced selling due to price drops [2]. - The company has $8.2 billion in convertible debt, which, while significant, provides flexibility in managing obligations [2]. - Strategy can extend maturities or convert debt to shares when due, with the first convertible note put date not until Q3 2027 [3]. Group 2: Cash Reserves and Fundraising Strategy - Strategy has $2.25 billion in cash on its balance sheet, reserved for dividend payments, indicating a strong liquidity position [4]. - Historically, the company has funded Bitcoin purchases through at-the-market (ATM) offerings, selling shares at current market prices to minimize market impact [5]. - The effectiveness of this fundraising strategy is contingent on the stock trading at a premium to its net asset value (mNAV), which has recently shifted to a discount as Bitcoin prices fell [6]. Group 3: Impact of Price Fluctuations - Trading below the cost basis is not a crisis for Strategy; it merely slows the company's ability to increase its Bitcoin holdings without diluting shareholders [7]. - In 2022, when MSTR shares traded below the Bitcoin holding value, the company added only about 10,000 Bitcoin, illustrating the impact of price on growth potential [7].