Key facts
- MicroStrategy's enterprise value has fallen below the value of its Bitcoin holdings.
- This situation has not been seen in years.
- The company's ability to raise capital through share issuance may be impacted.
- Issuing shares could dilute existing stockholders.
- Ripple CEO Brad Garlinghouse criticized MicroStrategy's Bitcoin funding strategy.
- Garlinghouse remains bullish on bitcoin.
- Garlinghouse stated MicroStrategy's preferred-share funding model has hurt the broader crypto market.
- MicroStrategy's STRC preferred stock has fallen significantly below its par value.
MicroStrategy's enterprise value has fallen below the market value of its substantial Bitcoin holdings, a financial milestone not seen in years. This development could significantly affect the company's capacity to raise additional capital through the issuance of new shares. If MicroStrategy needs to sell stock to fund further Bitcoin purchases or other operations, it may have to do so at a price that dilutes the ownership stake of its current stockholders. The company's strategy has long involved acquiring Bitcoin, often financed through debt and equity offerings.