Inside Strategy (MSTR): How Michael Saylor Engineered a Bitcoin Treasury Machine

Strategy’s evolution from a business intelligence vendor into a Bitcoin-first balance sheet is the cleanest test of whether a public company can industrialize BTC exposure. The software legacy remains, but the core story is a reflexive financing loop: use equity and debt to buy Bitcoin, let appreciation lift the stock, then rinse and repeat. When it works, it compounds. When it stalls, it exposes how path-dependent the model really is.

From software to BTC - Founded in 1989 by Michael Saylor, the firm went public on Nasdaq in 1998 as MSTR. In 2000, Saylor and two executives settled with the SEC over allegations the company had overstated revenue and earnings. - The stock largely moved sideways for years. That changed in 2020, when the company adopted Bitcoin as its primary treasury reserve and purchased $250 million of BTC as an inflation hedge. - In early 2025, the company dropped “Micro” and rebranded to Strategy, signaling that the software wrapper now houses a Bitcoin treasury business.

The financing engine Strategy shifted from one-off buys to a system. It leaned on convertible notes—short-term debt that can convert to equity—to raise capital and purchase BTC. Over time it layered in equity programs: - October 2024: signaled plans to raise up to $42 billion to expand BTC holdings. - January 2025: shareholders approved a 30x increase in Class A common shares. - Days later: launched Strike (STRK) at $80 per share, aiming to raise $584 million to buy more BTC. - February 2025: issued $2 billion in convertible senior notes. - Follow-on preferred offerings arrived—Stretch (STRC), Stride (STRD), Strife (STRF), Stream (STRE)—to tap different investor risk profiles. Strategy now self-describes as the world’s first and largest Bitcoin treasury company, leaning into its role rather than hedging it.

Saylor’s pivot Once a skeptic—he previously said Bitcoin’s “days are numbered”—Saylor has since become one of BTC’s most visible champions, arguing he will “buy the top forever.” His long-view target: $13 million per BTC over 21 years as Bitcoin absorbs a larger share of global capital.

Where the loop strains Reflexivity cuts both ways. MSTR often traded at a multiple of its net asset value (mNAV), peaking near 3.89x in November 2024. That premium made the engine hum: sell paper at a rich valuation, acquire BTC, repeat. When Bitcoin fell in 2026, Strategy’s mNAV slipped below 1—equity valued under the BTC it owns—and the stock dropped roughly 70% from August 2025 to February 2026. Q4 2025 reflected the stress with a $12.4 billion loss.

The bear case centers on the debt roll. If the stock remains weak, raising fresh capital gets harder, and if Bitcoin draws down sharply, fears of forced selling to service convertible notes resurface. Management counters with a playbook: refinance and carry liquidity. In December 2025, Strategy established a cash reserve seeded with $1.44 billion; by February 2026, Saylor said the company had more than 2.5 years of debt and dividends covered and could manage its ~$6 billion debt load even if BTC fell to $8,000.

Position today and stated ambition As of February 2026, Strategy holds 717,131 BTC worth nearly $48 billion—the largest Bitcoin stack among public companies—yet it sits more than $6.5 billion underwater on a lifetime cost basis, per SaylorTracker. The roadmap is expansive: evolve into a “Bitcoin bank” with a trillion-dollar valuation, issuing capital market products tied to BTC. Saylor has pitched the treasury blueprint to other boards; in December 2024 he suggested Microsoft could unlock $5 trillion by adopting Bitcoin. They declined.

My read on the core risk/reward The Manhattan analogy—add debt as values rise, build more—captures sentiment momentum but obscures a key constraint: MSTR’s engine depends on a persistent equity premium and open refinancing windows. When the mNAV compresses, optionality shrinks and the model relies on liquidity planning and lender confidence rather than asset appreciation. The firm’s growing cash buffer is a rational adaptation; it slows purchasing velocity but lengthens survival time, buying cycles to refinance without selling BTC at inopportune levels.

Investors should treat MSTR less like a software multiple and more like a leveraged, actively managed BTC vehicle with equity optionality. In bull phases, reflexivity can be powerful. In stress, governance discipline, disclosure quality, and liability management matter as much as the size of the Bitcoin stack. The play is elegant when premiums persist, and demanding when markets insist on cash flow over conviction.