The premium once commanded by Strategy for stock-based Bitcoin exposure has vanished. The company's enterprise value briefly dipped below the actual value of its Bitcoin holdings late last month.
Strategy holds over 847,000 Bitcoin, worth about $50.2 billion. However, its market capitalization has fallen to between $29 billion and $32 billion, with its stock trading around $82-an 85% drop from its peak.
CEO Phong Le stated that if this discount persists, selling Bitcoin could be a final option. In response, Strategy announced a new capital plan including a $2 billion share buyback authorization.
Executive Chairman Michael Saylor continues to buy Bitcoin, though the company recently sold a small amount for tax reasons. The buyback strategy is designed to let the company acquire Bitcoin indirectly at a discount using its own stock.
The primary risk is a further drop in Bitcoin prices while Strategy's fixed debt obligations remain, which could force structural liquidation of its holdings.