Saylor’s Bitcoin Treasury Strategy Inspires Global Corporations, But Not All See Premiums
Bitcoin for Corporations' George Mekhail highlights accretive vs. non-accretive models, as firms like Metaplanet follow MicroStrategy's debt-fueled accumulation playbook.
Bitcoin treasury strategies are being adopted by corporations worldwide. Following the example of Michael Saylor, the founder of Strategy (formerly MicroStrategy), the company with the largest known stack of Bitcoin in the world, others have copied his playbook and are attempting to follow suit; some are even trying to catch up.
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https://bitcoinmagazine.com/business/saylors-bitcoin-treasury-strategy-inspires-global-corporations-but-not-all-see-premiums
Microstrategy Company's Bitcoin holding has become more popular nowadays, because Michael Saylor has taken a huge risk for Bitcoin in the past and decided to hold it. Which is an example of all the treasury companies that MSTR Company currently has. Because you will be surprised to know the success of MSTR Company's Bitcoin holding at the present time, because you can see all the Bitcoin purchases after their holding since 2020 on this website wwwsaylortracker.com.
As a result of their Bitcoin holding from the past, they are currently at the top of the most success, but seeing MSTR Company's Bitcoin holding at the present time, all the other treasury companies that are more aggressive in buying Bitcoin.
The storey by MicroStrategy is encouraging, there is no doubt but it is not that easy: buy Bitcoin and become a winner. What Saylor did was successful because he was convinced of it, he had access to cheap capital and he was ready to take on huge risk when most people believed it to be insane. Other firms such as Metaplanet are currently attempting to emulate the same strategy of debt-driven growth since his bet is paying off.
The problem is that not all the companies are equally strong in their balance sheets or the patience of the investors. In case of a significant investment in buying Bitcoin on debt and the price falls over a long duration, shareholders may be diluted or even subjected to a debt burden. That is the reason why the point of George Mekhail regarding accretive vs. non-accretive strategies is significant. Should the value of Bitcoin increase at a rate higher than the cost of capital, it assists the company. Otherwise it can do more harm than good.
To businesses considering this, it simply depends on whether they regard Bitcoin as an asset to be used in the future as a reserve, or simply as a means of getting publicity. In the case of the former, they require solid risk management, allocation boundaries and liquidity cushions. When it is merely hype, the market tends to penalise that pretty fast.