When Bitcoin prices turned against Michael Saylor, he quietly pivoted to risky financial gambit at Strategy

Few business topics are garnering more coverage than Michael Saylor’s unconventional strategy at Strategy, the software purveyor turned Bitcoin treasury outfit he still controls as top shareholder and Executive Chairman (the firm was formerly known as MicroStrategy). But one big shift has gone almost entirely unnoticed. As Bitcoin prices plunged, Saylor has attempted to remediate the situation by unleashing a torrent of new shares, the size of which has never before witnessed by a big market cap U.S. company. This immense dilution is keeping his Bitcoin stash growing as a point of pride—but dragging shareholders into dangerous territory.

Let’s examine the specifics. At the close of Q2 2020, shortly before Saylor started buying Bitcoin, today’s Strategy had 76 million shares of Class A common stock outstanding (it also has Class B harboring extra voting rights that are mostly owned by Saylor; I’ll use Class A since they account for all the issuance in the past six years.) As of February 12, the number stood at 314 million. That’s an increase of 4.13x or 313%. For all of the several hundred U.S. companies that today valued at over $10 billion, the one ranking closest to Strategy over the same span was home furnishings and decor seller Wayfair at 30% dilution, one-tenth the Saylor number. In third place is software provider Twilio at 27%.

Strategy pioneered a model based on constantly increasing the amount of Bitcoin its investors own per share, or its key metric of BPS (Bitcoin per share). Until this year when it also moved into preferreds in a........

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