Strategy Buys Bitcoin With Proceeds From Preferred Shares as Key Premium Evaporates

Strategy has recently funded its Bitcoin acquisition through the sale of preferred shares, raising $50 million to purchase 487 Bitcoin, increasing its total holdings to nearly 641,700 Bitcoin. This purchase coincides with a significant decline in its market premium, which was close to its lowest in 20 months. The company was valued at $71 billion, reflecting only a 1.06x premium against its Bitcoin stockpile of $67.8 billion. Notably, short seller James Chanos has closed his position against Strategy's Bitcoin premium, indicating confidence in its future valuation. Historically, the company issued common equity to acquire more Bitcoin, but the diminishing premium has made this less effective. In addition, Strategy announced an expectation of $715 million from a new preferred share offering denominated in euros. The current market sees a noticeable decline in demand from digital asset treasuries, suggesting potential challenges ahead for Bitcoin prices.

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