Strategy Inc. (MSTR) keeps buying Bitcoin, but there's a problem: shareholders are getting diluted faster than the company can accumulate crypto. On Monday, Strategy disclosed it bought another 10,645 Bitcoin (BTC) for approximately $980.3 million between December 8 and December 14. That sounds impressive until you look at what's happening underneath the hood.

The Bitcoin Buying Machine Keeps Running

Strategy paid an average of $92,098 per Bitcoin in this latest round, funding the purchase through its now-familiar playbook of selling common stock and issuing preferred shares. The company raised nearly $989 million during the week through MSTR and its various preferred securities including STRF, STRK, and STRD.

As of December 14, Strategy holds 671,268 BTC acquired for roughly $50.33 billion at an average cost basis of $74,972 per Bitcoin. The strategy remains unchanged: accumulate Bitcoin primarily through capital markets activity rather than operating cash flow. It's basically a leveraged Bitcoin fund masquerading as a software company.

BTC Yield Breaks Its Winning Streak

Here's where things get interesting. Strategy's BTC Yield, the metric that tracks how much Bitcoin the company holds per diluted share, just turned negative for the first time in years. According to recent analysis, the quarterly BTC Yield came in at minus 1%, meaning shareholders now own less Bitcoin per share than they did at the end of September.

This matters because BTC Yield had been positive every year since 2020 and every quarter since April 2023. The whole pitch behind MSTR was that yes, they're diluting shareholders, but it's accretive dilution because they're buying Bitcoin faster than they're issuing shares. That narrative just broke.

Cash Hoarding And Premium Compression

Part of the problem stems from Strategy's decision to park $1.44 billion in a USD cash reserve instead of converting it all to Bitcoin. The company says this reserve is needed to meet future dividend obligations on those preferred shares they've been issuing. Prudent maybe, but it's capital sitting idle while Bitcoin presumably does Bitcoin things.

The math only works when Strategy can issue new equity or preferred shares at a premium to its Bitcoin net asset value. When that premium compresses, dilution becomes uneconomic. You're giving away more value than you're getting back.

The Premium Is Vanishing

And compress it has. Strategy's multiple-to-net asset value (mNAV) has been sliding since mid-2023, reflecting declining investor enthusiasm for buying Bitcoin exposure through MSTR rather than just buying Bitcoin directly.

Market data shows investors now value Strategy at roughly a 16% enterprise-level premium to its Bitcoin holdings. That's down from premiums above 240% as recently as November 2024. On a basic basis that excludes preferred shares and bonds, Strategy's market cap has actually fallen below the value of its Bitcoin stash.

When you're trading at or below net asset value, the entire leveraged accumulation strategy stops making sense for existing shareholders. You're just diluting them for no benefit.

Technical Picture Looks Weak

The stock chart isn't helping matters. MSTR tried to break out of its falling channel recently but failed, briefly pushing above resistance before falling back inside the downtrend structure. That's classic rejection behavior, not the start of a new uptrend.

The stock continues printing lower highs, with sellers defending the $190 to $195 zone. Technical indicators including Supertrend and SAR remain in bearish alignment, suggesting downside momentum hasn't reversed. As long as MSTR trades below roughly $195, the downtrend stays intact. Near-term support sits around $175, with additional risk toward $160 if that level breaks.

The irony is that Strategy is still accumulating Bitcoin aggressively. But when the premium disappears and the per-share metrics go negative, you have to wonder whether shareholders wouldn't be better off just buying Bitcoin directly.