Strategy stock hits four-month low after easing share sale rules

Strategy’s stock (MSTR) fell to its lowest point since April after the company changed its rules for selling shares. The stock closed at $336.57 on August 19, down from $363.60 the previous day.

The company filed new guidance on August 18 that expands when it can sell common stock below a key financial threshold. Strategy uses a metric called mNAV (multiple on net asset value), which compares its enterprise value to the value of its Bitcoin holdings.

Under the previous policy set on July 31, Strategy could only sell stock below 2.5 times mNAV to pay debt interest and preferred stock dividends. The updated policy adds a third reason: “when otherwise deemed advantageous to the Company.”

The change gives Strategy more flexibility in its stock sales. The company’s July framework had three tiers: no stock sales below 2.5 times mNAV except for specific payments, opportunistic sales between 2.5 and 4.0 times mNAV, and active sales above 4.0 times mNAV to buy more Bitcoin.

Strategy also reported buying 430 BTC between August 11 and 17 for $51.4 million. The purchase brought the company’s total Bitcoin holdings to 629,376 coins, acquired for a total of $46.15 billion.

The company still has approximately $17 billion available under its at-the-market stock offering program as of August 17, according to the SEC filing.

Strategy, formerly called MicroStrategy Incorporated, operates from Tysons Corner, Virginia. The company runs multiple preferred share programs alongside its common stock trading under the ticker MSTR on NASDAQ.

The company said it may review and update its mNAV thresholds periodically. Management defines mNAV as enterprise value divided by “Bitcoin NAV,” a metric the company publishes on its website.