On June 22nd, Strategy Inc. sold $335.5 million in common stock, set aside approximately $300 million in cash to bring its reserves up to $1.4 billion, and used the remaining money to purchase a total of 520 Bitcoins.
So the company that wrote the entire corporate Bitcoin strategy spent the bulk of its dilutive equity raise to replenish its preferred dividend cushion, and did so shortly after STRC Permanent Preferred Stock fell to an intraday low, weakening one of its primary funding channels.
The company’s year-to-date BTC yield (which CEO Michael Saylor uses as a number to indicate that common shareholders own more Bitcoin per share with each financing) fell to 11.8% from 13% last month, but the diluted share count rose to about 388.6 million shares.
That week is a pretty good snapshot of how the whole Bitcoin Treasury trade ended up. For most of the past two years, publicly traded companies that hold Bitcoin have been rewarded for doing one thing: buying more Bitcoin, so any new purchases, bigger goals, or new loan approvals can send their stock price higher.
What has changed now is that investors have started applying tougher tests to every trade. They’re holding off on headline buys to consider whether this hike actually gives them more rights to Bitcoin after dilution, preferred dividends, cost of debt, and cash withheld, or whether it just adds to the company’s pile and thins some of it out.
The first phase of this transaction was about accumulation, but the phase we’re in now is about attribution. That is, how much of that ever-growing pile still belongs to the common stockholders, after all the funding layers have taken away their share.
The market has stopped writing blank checks.
The first sign of change is something called mNAV compression. This is the ratio of a treasury company’s market value to the value of the Bitcoin it holds. When the stock trades above the value of the coin, the company can issue new stock and buy Bitcoin at that premium, thereby increasing the value of Bitcoin per share for everyone who already owns Bitcoin.
The problem begins when the premium wears off. Because at that point, the same ruse begins to pass value to new buyers at the expense of those who already own the stock.
Metaplanet, Asia’s largest corporate holder, holds 40,177 BTC worth about $2.4 billion, but its enterprise value is below that, with mNAV of about 0.9x, suggesting that the market currently values the company as a whole lower than Bitcoin on its books. The stock price has fallen significantly, down about 47% year-to-date, with the quarterly BTC yield at -0.40%.
CEO Simon Gerovich has been open about the move, saying the company will strongly consider share buybacks if mNAV falls below 1.0x and has already taken steps to halt new common stock issuance at that level. The company has about $1.6 billion in unrealized losses on coins purchased far above Bitcoin’s current trading price, and firememecoins is tracking how it weathered that brutal repricing while its peers stalled.
What we’re seeing here is a disciplinary cycle playing out within the balance sheet. Shareholders refuse to pay the premium, the accretive funding engine stalls, and management ends up protecting Bitcoin per share by reducing the number of shares, as it is impossible to increase the actual stack as long as the discount continues.
The value of the strategy increases with each round. The company held 847,363 BTC as of June 21, representing more than 60% of all Bitcoin on the balance sheets of publicly traded companies around the world, with more than $13.5 billion in preferred stock piled up in front of common shareholders.
The company has purchased approximately 174,300 Bitcoin this year, and Bitwise estimates that approximately 55% of that was funded through STRC preferred issuance. When that started to waver, Strategy diluted common shareholders to protect its dividend. firememecoins took up the claim that the strategy continues to buy Bitcoin while MSTR holders eventually reduce their Bitcoin holdings.
While serious financial companies now cite Bitcoin per fully diluted share as a key indicator of success, the honest assessment is that the growth in Bitcoin on the balance sheet and the growth in Bitcoin per shareholder are no longer linked as they once were.
Europe has inherited the same problem
In Europe, French-listed company Capital B, formerly known as Blockchain Group, just won shareholder approval on June 17 for a capital increase of up to 5 billion euros and a credit instrument of 100 billion euros. This equates to approximately $120 billion in authorized lending capacity, backed by a current stack of 3,139 BTC worth approximately $200 million.
The company has structured all of its activities around increasing its fully diluted Bitcoin per share, telling the market that it wants to own 15,000 BTC by the end of 2027, with much longer-term ambitions to own 1% of all Bitcoin.
Sweden’s BTC AB is running a smaller, faster version of the same idea. The company launched a rights issue of up to 195,078 Class A preference shares at a price of SEK 120 per share, raising approximately SEK 23.4 million, or approximately $2.5 million.
Each of these stocks pays a monthly annual dividend of 10%, all of which stack up to holdings of approximately 171 BTC. The subscription period ends on June 30th, but early deals already cover about 27% of the issue, so there is significant demand even at this small size.
When you put the two side by side, the demands on investors are the same. Take on increasingly complex capital structures and trust that in the future Bitcoin will outperform the dilution, preferred dividend, and redemption terms set to get there. The conversation moved away from who would buy the bitcoins to who would actually pay for them, and on what terms.
The four largest players in the market are now in four very different positions. A year ago, the market would have rewarded all companies for the same behavior, but now it prices each company based on the terms of its financing.
| company | BTC holdings | Comparison of trading and proprietary Bitcoin | Latest funding moves | Shareholder catch |
|---|---|---|---|---|
| Strategy (MSTR) | 847,363 | On a corporate basis, it’s about 1.18x, but common stock undervalues preferred stock by more than $13.5 billion. | Sold $335.5M in stock, kept ~$300M in cash, bought 520 BTC | BTC yield decreased to 11.8% due to increased dilution as dividend source |
| metaplanet | 40,177 | ~0.9x, completely below the value of Bitcoin | Suspended new stock issuance. Consider stock buybacks while mNAV is less than 1.0x | Quarterly BTC yield turned negative at -0.40%. |
| Capital B | 3,139 | Depends on premium, trading is thin | 5 billion euros of capital and 100 billion euros of credit approved (~$120 billion) | Capacity has been approved, but pricing has not yet been determined. Dilution conditions are still unknown |
| BTCAB | ～171 | Depends on premium, trading is thin | Issuance of preferred shares worth 23.4 million Swedish kronor (approximately $2.5 million) | Annual dividend rate of 10% is higher than common shareholders |
Strategy still commands a premium given its priorities and debt, but its common shareholders are below the Bitcoin per share line, while Metaplanet is completely below Bitcoin, with the two European companies asking the market to fund them before anyone knows what the terms will be.
A big part of the reason the bargains have changed is because of ETFs. Because they provided investors with direct exposure to clean, cheap Bitcoin, treasury companies now have to explain why they should hold a leveraged, diluted corporate wrapper when billions of dollars could be drained from U.S. spot ETFs in six weeks and the coin itself is available with one click.
These stocks once had true scarcity as a way for the public market to own Bitcoin, but that scarcity is now gone, so wrappers need to justify themselves with something special: leverage, yield, sharp capital market execution. Companies that offer nothing more than diluted Bitcoin exposure will end up trading at a discount.
None of this is automatically bad news for Bitcoin itself. A shareholder base that punishes reckless fundraising could push the entire sector toward better capital allocation, cleaner disclosures, and more honest per-share accounting. firememecoins’s report frames these companies as both true tailwinds and potential stress amplifiers, depending on how they are financed.
Companies that can issue shares above their NAV and continue to grow Bitcoin per share will come out of this situation with credibility intact, while weaker companies will see their prices repriced or their new capital cut off.
The real danger lies in the funding loop. Treasury companies that can no longer issue stock above their NAV are left with no path to buying more Bitcoin, and if they are still eyeing preferred dividends or debt coupons, their remaining options quickly become uglier. Either dilute it, lend out the coins, or start selling assets.
firememecoins covered Strategy’s unique exploration of Bitcoin lending. This is a move that transforms holding companies into a whole new category of risky credit businesses. Once that premium runs out, the Bitcoin accumulation machine becomes a balance sheet problem with a recurring dividend bill attached.
The companies that won in the first phase of this transaction won by proving they could buy more Bitcoin faster than anyone else. The companies that win in the next phase will do so by proving that their common shareholders still own more of their Bitcoin, even after all the financing is completed and the market finally starts keeping score.
(Tag Translation) Bitcoin
