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

Strategy's latest Bitcoin acquisition, funded with preferred-share proceeds, marked a strategic shift as its premium against Bitcoin holdings declined significantly. The company raised $50 million through preferred stock to purchase 487 Bitcoin, increasing its holdings to nearly 641,700 Bitcoin. This purchase was facilitated as the market cap reached approximately $71 billion, reflecting a 1.06x premium over its $67.8 billion Bitcoin stockpile. The premium, an indicator of market valuation relative to asset value, has diminished from a high of 2.7x observed a year prior. Short seller James Chanos revealed he had closed his position betting against Strategy's premium trend, highlighting a belief that the premium would continue to compress. Concurrently, Strategy is preparing to issue its first preferred share denominated in euros, expecting to raise $715 million, which could further bolster its Bitcoin acquisitions. Analysts predict this dynamic aligns with historical market cycles, as Strategy's capital growth and premium structure evolve in response to market conditions.

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