Strategy CEO Michael Saylor: The Orange Tie Will Never Come Off
Michael Saylor, founder and executive chairman of Strategy (formerly MicroStrategy), responded on social platform X to renowned angel investor Jason Calacanis's concerns about the risks of Bitcoin strategy. He reiterated that Bitcoin is a "successful case worth $1.6 trillion" and stated that "digital capital is the real killer app," concluding with the phrase "the orange tie will never come off," implying he will not change his established strategy.
Saylor mentioned that Calacanis has been following Bitcoin's growth since 2011, but now their differences regarding the sustainability of Bitcoin accumulation strategies have become public. Calacanis has previously warned that Saylor's approach of continuously increasing Bitcoin holdings through leveraged tools such as preferred shares and convertible bonds could "break" the Bitcoin ecosystem, pointing out that this corporate concentration of holdings is undermining the core value proposition of Bitcoin's decentralization, with long-term financial risks potentially dragging down the entire crypto market.
As of now, Strategy holds approximately 845,050 Bitcoins, valued at about $63.7 billion at current market prices, with an average acquisition cost of about $75,400 per Bitcoin. As of September 15, Bitcoin closed at $75,584, nearing the company's acquisition cost; as a result, Strategy reported a net loss of $8.22 billion in the second quarter due to the fair value accounting of digital assets. Over the past year, the company's stock price (MSTR) has fallen by about 60%, and the premium of the stock relative to Bitcoin's net asset value (mNAV) has narrowed significantly to around 1.04 times, down from a previously maintained high premium, indicating a marked decrease in market confidence in its "debt issuance and coin accumulation" model.
In response to the weak stock price, Strategy has recently paused its Bitcoin accumulation and shifted funds towards preferred share buybacks: on September 14, it spent $139 million to repurchase STRC preferred shares, following a $176.3 million buyback the previous week. The board has doubled the buyback plan for preferred shares to $2 billion, with management stating that this move aims to conduct "value-enhancing" buybacks below the $100 par value, prioritizing the payment of dividends and interest obligations over continued coin accumulation. The company currently holds $6.4 billion in cash reserves to cover related interest and dividend expenses.
Analysts point out that if MSTR is removed from the MSCI index, the probability has risen to 78%, which would force passive funds tracking the index to sell off, further suppressing the stock price; conversely, if Bitcoin's price falls below $70,000, it would completely shake the company's balance sheet logic and investment narrative. On the other hand, if Bitcoin breaks back above $120,000, the company's paper losses would turn into significant profits, with theoretical stock price upside estimated at 97%. MSTR currently has a beta coefficient of 3.6, meaning its stock price volatility is about 3.6 times that of Bitcoin itself.
In terms of capital flow, Saylor's strong statement comes at a sensitive juncture where Bitcoin's price approaches Strategy's acquisition cost line, the company's stock price has significantly retreated, and it faces potential sell-off pressure from passive funds. Essentially, this is a call to the market to stabilize investor confidence and avoid panic selling that could further lower the mNAV premium. Critics like Calacanis represent a bearish sentiment towards the corporate leveraged coin accumulation model, believing that ongoing debt-driven purchases will ultimately backfire on Bitcoin's liquidity; Saylor's firm stance aims to consolidate the confidence of Bitcoin bulls and Strategy shareholders, preventing further deterioration of market sentiment that could trigger a chain reaction of passive selling pressure from indices. The real beneficiaries would be institutional buyers who accumulate at lower prices after Bitcoin stabilizes and rebounds, while the pressured parties are passive fund holders currently forced to watch from the sidelines or reduce their MSTR positions.
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Saylor's public statement is not an isolated incident but a continuation of his consistent "contrarian call" style. Since shifting the original MicroStrategy's corporate funding strategy towards Bitcoin in 2020, Saylor has repeatedly chosen to speak out rather than remain silent during significant Bitcoin price retracements and the expansion of the company's paper losses: in 2022, when Bitcoin fell from nearly $69,000 to around $15,000, resulting in billions of dollars in impairments on the company's books, Saylor still insisted on the narrative that "Bitcoin is the ultimate collateral" and continued to increase holdings through debt issuance and stock offerings, never publicly acknowledging any issues with the strategy.
From a capital operation perspective, Strategy's core model is to finance Bitcoin purchases through the issuance of convertible bonds and preferred shares (such as STRC, with a 12% annual dividend rate, paid biweekly), transforming the traditional corporate balance sheet into a "Bitcoin leverage machine." However, the company's capital flow has shown a clear shift: since September, over $300 million has been used to repurchase discounted STRC preferred shares over two consecutive weeks, rather than continuing to accumulate Bitcoin, and the board has simultaneously doubled the buyback cap for preferred shares to $2 billion. The motivation for this adjustment lies in the fact that when the mNAV premium compresses to 1.04 times and the traditional "premium issuance of shares for coins" arbitrage opportunity disappears, repurchasing discounted preferred shares becomes more capital-efficient than continuing to buy Bitcoin, essentially shifting from an "offensive coin accumulation" strategy to a "defensive balance sheet management" approach.
This combination of "publicly maintaining a hardline narrative while quietly shifting capital structure" is reminiscent of certain portal executives who, after the bursting of the 2000 internet bubble, continued to uphold the narrative of "eyeball economy," or some investment bank executives who publicly remained bullish during the 2008 financial crisis while privately deleveraging—maintaining a strong public stance to stabilize shareholder and market sentiment while actual operations have shifted towards risk control. Strategy's current industry position has evolved from being the "only sample of aggressive expansion" in its early years to being repeatedly cited as a "leveraged coin accumulation model" risk case within the industry, with its every move seen as a key indicator for testing the sustainability of corporate Bitcoin treasury strategies.
This phenomenon essentially represents a dual pressure test of "capital concentration" and "pricing power transfer": on one hand, Strategy holds about 4% of the total Bitcoin supply, and its every move has the ability to influence market liquidity and price discovery. If passive index funds are forced to sell due to the risk of MSCI removal, it will directly test the actual control over pricing power of this concentrated holding model in the secondary market; on the other hand, the public confrontation between Saylor and Calacanis reflects that the narrative dominance of Bitcoin is shifting from early geeks and believers to institutional capital operators and risk management professionals—Bitcoin's price discovery mechanism is gradually transitioning from being "faith-driven" to being driven by "leverage and liquidity mechanisms," which is the deep-seated reason for its occurrence.
ABAB News · Cognitive Law
- Faith can withstand bear markets, but balance sheets cannot.
- Leverage amplifies faith, but also amplifies liquidation.
- The day the premium disappears is when the strategy reveals its true character.