Michael Saylor’s Bitcoin fuel business model is dividing under pressure. A 15% decline in shares in this month’s strategy wiped out the premiums the company once enjoyed Bitcoin Holdings and pulled out the rug under a plan that shaped crypto buyers for an entirely new class of companies.
The company’s approach uses its balance sheet as a way to buy Bitcoin, and is being tested more intensely than ever as investors get more impatience and competitors grow.
The losses began with a new funding plan for the strategy. Saylor has introduced preferred stocks as a company’s go-to method to buy more Bitcoin. problem? Barely anyone wanted that. Recent sales were withdrawn for just $47 million, far below what Saylor was aiming for.
To cover the gap, the company reversed to regular stock sales despite previously saying it wouldn’t.
Strategies retreat as premiums shrink and critics speak out
The entire Saylor playbook influenced the long list of copycats in the Treasury. Today, companies following the same model hold more than $100 billion in Bitcoin. This is 4.7% of the total supply tracked by Bitcointreasuries.net.
If the strategy premium collapses, the entire framework behind Treasury-style Bitcoin purchases could collapse. Jake Ostrovskis, principal analyst at WinterMute’s OTC desk, said the reduction in premiums was “a natural response to competition and an alternative way for traders to get exposed to crypto.”
However, according to Jake, the deeper question is the company’s decision to return its pledge not to issue the shares if the shares traded at less than 2.5 times its net worth. That sudden change is forcing investors to rethink everything.
From that point on, the stocks stopped trading revenues and instead began following the company’s crypto-holding, using a metric called MNAV Guided valuation.
That multiple is never stable. After Donald Trump won reelection, he tanked during Terra Luna’s collapse and then jumped to 3.4. It is currently at 1.57 in 2025. The twist is that this crash did not occur during the recession.
In late July, the company said it would not issue shares if the MNAV multiple drops below 2.5, except in rare cases. Two weeks later, the guidance was rewind, with about 900,000 shares being sold on August 25th. Online, some investors call it a violation of trust.
Issuing shares at that level could create a loop. A drop in inventory hurts the power, reliability and cycles of Bitcoin purchases.
Saylor did not explain the change. Instead, he posted an AI photo of himself walking past the giant bear. The company did not answer the questions. His supporters say flexibility is helpful if the strategy joins the S&P 500 or if Bitcoin jumps again.
Other companies struggle as ETFs rise and Bitcoin emotions change
However, the strategy issue is not unique. Capriole Investments says almost a third of public companies with Bitcoin on their balance sheets are currently trading below the value of their holdings.
Small and medium-sized businesses are at higher risk. They don’t have much room to raise cash. Also, many people use convertible notes.
A strategic plan to eliminate all convertible notes within four years. Instead, they want to only use preferred stocks, a type of security that doesn’t require repayment. Most small businesses can’t follow that path. They don’t have the same scale or reputation as bringing it out.
There is more competition now. Over the past year, individuals politically connected to influencers have rushed into the market by shaping crypto businesses through SPACS and reverse mergers. These outfits don’t have the same fluidity and staying power as strategy. Many could be wiped out by the recession.
Plus, Spot Bitcoin ETFs have gained traction. When they first launched, both the ETF and strategy rode a wave of optimism after Trump’s victory. But now the ETF looks like a cleaner. They give investors Bitcoin exposure without corporate risk, debt or surprising dilution.
Meanwhile, the ether-supported finance company has already committed over $19 billion. Bitcoin has pulled back from its recent highs, but it still has institutional interest.
The problem is that many new finance companies buy more than $100,000 in Bitcoin and don’t have the actual business to resort to if the market flips.