Strategy’s Aggressive Bitcoin Acquisition Sparks Investor Concern

Strategy Inc. has initiated its most significant Bitcoin purchasing spree in six months, acquiring a substantial 10,624 BTC between December 1st and 7th. The nearly $963 million expenditure was funded entirely through equity sales. While the company’s shares responded positively initially, climbing 2.6 percent to $183.69 on Monday, the financing method has raised significant red flags among market analysts.

Equity Sales Fuel Crypto Buying Binge

To finance this massive crypto acquisition, Strategy leveraged capital markets aggressively. The company raised $928 million from the sale of 5.13 million common shares, supplemented by an additional $35 million from preferred stock offerings. The average purchase price for Bitcoin was approximately $90,615 per coin.

This latest buying wave expands Strategy’s holdings to 660,624 BTC, representing over 3.1 percent of Bitcoin’s total possible supply of 21 million coins. The firm’s total cost basis for its entire portfolio stands at $49.35 billion, reflecting an average entry price of $74,696 per Bitcoin. With current prices hovering around $91,000, the company is sitting on an unrealized gain of roughly $11 billion.

Dilution Fears Trigger Analyst Downgrades

The decision to fund the purchase through share issuance is drawing sharp criticism. Analysts have swiftly adjusted their outlooks, citing heightened dilution risks for existing shareholders. TD Cowen reduced its price target from $535 to $500, explicitly pointing to these increasing dilution concerns. Cantor Fitzgerald issued an even more drastic revision, slashing its target from $560 to $229—a staggering 59 percent cut.

Should investors sell immediately? Or is it worth buying Strategy?

Despite a recent partial recovery, Strategy’s stock price remains more than 50 percent below its six-month highs. In a related move just one week prior to the Bitcoin purchase, the company established a $1.44 billion USD reserve. This fund is intended to cover dividend obligations on its preferred shares for a 21-month period, a signal that its cost of capital is rising.

Revised Forecasts and Technical Indicators

The volatile cryptocurrency market has forced Strategy to recalibrate its financial guidance for 2025. Following Bitcoin’s decline from a late-October peak of $111,612 to a November low beneath $81,000, the company revised its projections downward. Details of the updated target range were included in an SEC filing, highlighting Strategy’s ongoing dependence on Bitcoin’s price performance.

Technical indicators further illustrate the stock’s turbulent state. The Relative Strength Index (RSI) currently reads 84.2, signaling a technically overbought condition. Meanwhile, the annualized 30-day volatility sits at 60.66 percent, underscoring the extreme price swings characteristic of the asset. In pre-market trading on Tuesday, shares were quoted at $183.37.