MicroStrategy, the largest Bitcoin (BTC) corporate holder, is facing mounting backlash. This follows Executive Chair Michael Saylor’s announcement of a now-controversial update to the company’s equity issuance policy.
The move removes a long-standing safeguard that prevented the firm from selling stock below a 2.5x multiple of its net asset value (mNAV), a measure designed to protect shareholders from dilution.
Investor Trust Shaken as MicroStrategy Prioritizes “Flexibility” Over Safeguards
In an August 18 post, Saylor said the company updated its MSTR Equity ATM Guidance to provide greater flexibility in executing our capital markets strategy.
While framed as a step toward strategic agility, the change has ignited anger among investors. Based on community feedback on X (Twitter), users accuse Saylor of breaking promises and eroding confidence in MicroStrategy’s governance.
More closely, critics say the adjustment effectively grants management the ability to issue shares whenever it sees fit, regardless of valuation. For many, this represents a sharp departure from earlier commitments.
“Saylor pulled the rug. I’ve been warning people for months that he is a sleezy, corrupt fraud. He lied to investors and promised $MSTR wouldn’t issue stock below 2.5x mNAV,” wrote WhaleWire CEO and financial analyst Jacob King.
According to King, the move comes after MicroStrategy’s premium crashed from 3.4x to 1.6x since November 2024.
This crash, King alleges, prompted Saylor to restructure in favor of management flexibility.
“What does it mean? He can now dilute shareholders anytime it benefits him. This was never about Bitcoin; it’s about Saylor cashing in,” King added.
Other investors echoed the sentiment, highlighting that during Strategy’s earnings call, Michael Saylor said they would not ATM the common below a 2.5 mNAV.
However, they are now giving themselves permission to do it based on whatever subjective, unpublished whim makes them think it’s a good idea.
“Not happy about this. This isn’t what was communicated 2 weeks ago on the earnings call,” Simecka stated.
In particular, the investor is concerned about MicroStrategy’s move changing and reneging on a past promise.
Could MicroStrategy’s Guidance Put Credibility at Stake?
Community members remain skeptical, with some calling it a classical Wall Street move. Even those sympathetic to MicroStrategy’s Bitcoin-centric mission struggled to defend the pivot.
“He’s folding. This may be better since the old announcement guaranteed death. Also, switching up doesn’t inspire confidence,” wrote Commentator based16z.
Market observers like Daan Crypto Trades highlighted that the change puts “Saylor bid” back in play. This means allowing the company to sell stock to buy more Bitcoin when deemed advantageous.
Meanwhile, investor concerns extend beyond broken promises. Some warn that the policy shift could exacerbate risks tied to Bitcoin’s volatility.
“The updated MSTR Equity Guidance… could potentially hurt the company by diluting shareholder value, eroding investor confidence, putting downward pressure on the stock price, and increasing financial risk due to dependency on Bitcoin’s volatility,” one user observed.
The backlash highlights a growing divide between Saylor’s relentless Bitcoin-first strategy and shareholders who fear being sacrificed in the process.
However, MicroStrategy’s past guidance left room for reevaluation, so they are well within their right to issue this new guidance.
“MicroStrategy will review these mNAV thresholds periodically and may update the mNAV thresholds in its sole discretion,” the firm stated.
Is the update a savvy financial maneuver or a costly credibility hit? By loosening its equity issuance guardrails, MicroStrategy has reignited debate about whether its strategy serves investors, or Michael Saylor himself.
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