Michael Saylor's MSTR Could Be 'Hit Hard' If BTC Tumbles: Strategy Is 'High-Stakes And Risky Now, But So Far, It's Working,' Says Analyst

As Michael Saylor‘s Strategy Inc. MSTR added more Bitcoin BTC/USD and issued a statement announcing an additional $1 billion capital raise, this analyst asked if the BTC Treasury company was “still investing, or has Bitcoin become the business?”

What Happened: Arthur Azizov, the founder and investor at B2 Ventures, told Benzinga that if Bitcoin regains its momentum and eventually sets a new all-time high, MSTR will become the most successful asset allocator in corporate history.

“With more dry powder from the raise, they can easily keep buying dips and strengthen their position,” he explained.

On the other hand, if the BTC price stabilizes, Strategy can continue keeping its "long-term conviction" course.

“But if it drops sharply, the risks are real. Impairment charges could hit hard, and MSTR's stocks, being tied to BTC, could take a beating. Investors' sentiment, in that case, goes sour, while debt obligations put serious pressure,” he said.

This comes as a new accounting rule states that Bitcoin is measured at a fair value in a company’s financial statements, meaning that any significant price fluctuation (up or down) directly influences the company’s income statement each reporting period.

“Michael Saylor's strategy is high-stakes and risky now, but so far, it's working,” added Azizov.

Why It Matters: With its latest purchase, Strategy now holds a total of 582,000 BTC, bought at a cumulative cost of $40.79 billion, averaging $70,086 per coin. This was its ninth consecutive week of BTC accumulation.

Meanwhile, on June 3, MSTR introduced its third preferred stock product aimed at raising $1 billion to fuel further Bitcoin purchases and cover general corporate expenses.

MSTR shares ended 4.71% higher on Monday and advanced by 1.15% in after-hours. It has risen by 30.70% on a year-to-date basis and 145.09% over a year.

Benzinga Edge Stock Rankings show that MSTR had a strong price trend over the short, medium, and long term. Its momentum ranking was solid, whereas its value ranking was poor at the 3.50th percentile. The details of other metrics are available here.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended flat on Monday. The SPY was up 0.09% to $599.68, while the QQQ advanced 0.15% to $530.70, according to Benzinga Pro data.

On Tuesday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading slightly below the flatline.

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