TLDRs
- Strategy stock rose 3.3% even as Bitcoin-per-share growth nearly disappeared.
- Diluted share growth outpaced Bitcoin holdings, weakening common shareholder economics.
- Management prioritized preferred share buybacks instead of repurchasing MSTR common stock.
- Analysts remain bullish, though several firms trimmed their price targets.
Strategy (NASDAQ: MSTR) climbed back above the $100 level on Friday, gaining 3.3% in a session that extended its weekly advance to 7.2%.
The rally came despite a sharp deterioration in the company’s Bitcoin-per-share growth, a metric closely watched by investors who view Strategy as a leveraged Bitcoin vehicle rather than a traditional software company.
The stock closed at $100.01 while Bitcoin traded near $64,850, up less than 1% on the day. The divergence highlighted renewed buying interest in Strategy shares even as the underlying economics for common shareholders became less favorable.
Bitcoin-per-share nearly stalls
Strategy uses Bitcoin per share (BPS) to measure how much Bitcoin is effectively attributable to each diluted share outstanding. The figure is calculated by dividing total Bitcoin holdings by the estimated diluted share count.
At the end of the second quarter, BPS had improved by 4.8%. However, by August 2, most of that gain had disappeared. The metric fell 4.3% from its June level, leaving it only 0.3% higher than it was on March 31.
The reversal was driven by two simultaneous developments: a slight decline in Bitcoin holdings and a notable increase in the share count. Strategy’s Bitcoin treasury fell from 846,000 BTC at the end of June to 842,138 BTC by early August, while assumed diluted shares rose from 401.3 million to 417.3 million.
That imbalance mattered. For shareholders, the denominator grew faster than the numerator, meaning each share represented a smaller proportional claim on the company’s Bitcoin holdings.
Capital activity reshapes the picture
The weakening BPS trend followed an active week of capital management. Strategy sold roughly 3.01 million MSTR shares, generating about $290.6 million in net proceeds. It also sold 1,638 Bitcoin for approximately $104.7 million.
Rather than repurchasing common shares, the company directed capital toward its STRC preferred shares. Strategy bought back more than 912,000 STRC shares for about $81.2 million, reducing future preferred dividend obligations.
Chief Executive Phong Le said preferred repurchases represented an attractive use of capital because they could lower future cash outflows while being executed at a discount.
The company still has authorization for up to $1 billion in MSTR buybacks, but none of that authorization was used during the period.
Stock outpaces Bitcoin peers
Friday’s move left Strategy outperforming Bitcoin for the week. Bitcoin gained roughly 3.1% over the same period, while MSTR advanced more than 7%.
The broader crypto-equity space showed mixed performance. Coinbase rose 5.6% on Friday and gained 5.0% for the week, while MARA Holdings fell 5.1% on the day and declined 10.9% over the week.
The contrast suggests investors are becoming increasingly selective within crypto-linked equities, rewarding companies with stronger liquidity profiles or capital-management narratives.
Analysts stay positive, targets trimmed
Wall Street remains broadly constructive on Strategy, although several firms reduced their price targets following the latest results.
Cantor Fitzgerald lowered its target to $186 from $212 while maintaining an Overweight rating. B. Riley cut its target to $155 from $215 and kept a Buy rating. Barclays trimmed its target to $125, while H.C. Wainwright maintained a $325 target and a Buy recommendation.
The average target among analysts tracked by MarketBeat remains well above the current share price, implying substantial upside if Bitcoin strengthens and Strategy can stabilize shareholder dilution.
Treasury value still enormous
Strategy reported a second-quarter net loss of $8.22 billion, largely due to an unrealized digital-asset loss of $8.32 billion under accounting rules. Revenue rose 6.9% year over year to $122.4 million.
Despite the accounting loss, the company’s Bitcoin holdings remain massive. At a Bitcoin price near $64,850, Strategy’s 842,138 BTC were worth about $54.6 billion. That value was still roughly $8.9 billion below the company’s reported acquisition cost of $63.5 billion.
Investors are now focused on a simple but crucial question: can future Bitcoin accumulation grow faster than the expanding diluted share count?
For now, the market has pushed MSTR back above $100. But the latest data suggest that rising share prices are not automatically translating into stronger Bitcoin ownership for each common shareholder, leaving dilution as one of the stock’s most important risks heading into the next inflation and retail-sales data releases.
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