Michael Saylor is embroiled in a public discussion regarding accusations that Strategy’s recent share sale was dilutive. Following its latest bitcoin acquisition, Strategy’s BTC Yield declined from 13.0% to 12.8%, igniting a debate on X regarding the potential dilution for shareholders. What to know:
— Despite acquiring 1,550 BTC, Strategy’s BTC Yield decreased to 12.8% from 13.0%, prompting bitcoin proponent Matthew Kratter to assert that the deal was dilutive on a bitcoin-per-share basis.
— Saylor argued that BTC Yield is a limited measure that does not account for cash reserves, asserting that the addition of around $100 million to Strategy’s U.S. dollar reserves made the transaction accretive when total assets are evaluated.
Tensions are rising as the bitcoin community reacts. Strategy’s (MSTR) recent bitcoin acquisition has led to a public debate on X between Executive Chairman Michael Saylor and bitcoin supporter Matthew Kratter regarding whether the company’s latest capital raise was beneficial or detrimental for shareholders. The contention revolves around Strategy’s own performance indicator, BTC Yield, which tracks alterations in bitcoin holdings per assumed diluted share. As per the latest data from Strategy, BTC Yield fell from 13.0% on June 1 to 12.8% on June 8, after the company added another 1,550 BTC to its portfolio.
Kratter contended that this decrease indicates the transaction was dilutive on a bitcoin-per-share basis. During this timeframe, Strategy’s bitcoin reserves increased from 843,706 BTC to 845,256 BTC, while the assumed diluted shares outstanding grew from 382.756 million to 384.180 million. Additionally, BTC Gain YTD dropped from 87,754 BTC to 86,328 BTC.
Saylor countered by stating that BTC Yield is a narrow KPI that only measures bitcoin per share, rather than total shareholder value. He mentioned that the transaction also contributed approximately $100 million in U.S. dollar reserves, bringing the total USD reserves to $1 billion, thus rendering the deal accretive when both bitcoin and cash reserves are taken into account.
When examined solely through the lens of BTC Yield, the recent capital raise appears dilutive. However, Saylor argues that including cash reserves and the broader effects on the balance sheet indicates that the transaction enhanced shareholder value.
Others joined the conversation. «Notice they keep changing the rules to fit the financial alchemy they’re doing,» remarked Wazz. «Initially, $BTC yield was widely publicized and featured in every buy announcement as the standard accretive metric. Now it’s described as a ‘narrow KPI’ that is irrelevant.»
«As a short seller, I’ve observed countless companies ‘move the goalposts,’ and attempt to shift the market’s focus onto new metrics when the old ones no longer support their narrative,» stated Quoth the Raven. «Sometimes, companies even eliminate key performance indicators (KPIs) and adopt new ones altogether.