(TheStreet) - Former White House Communications Director Anthony Scaramucci recently praised Strategy (NASDAQ: MSTR) co-founder Michael Saylor.
Saylor, who once convinced Scaramucci to rewrite the ending of his book, has seen his firm’s fortunes fluctuate alongside Bitcoin’s sharp correction from $126,000 in early October to around $82,000 in late November.
The price drop has once again spotlighted Strategy’s close correlation with BTC’s market performance.
Strategy’s regulatory saga
JPMorgan earlier warned that Strategy could be removed from major equity indices, including the MSCI USA Index, a benchmark tracking large- and mid-cap U.S. companies that represent about 85% of the U.S. stock market.
On Dec. 2, MSCI confirmed it is reviewing Strategy’s eligibility for several indexes, noting a potential rule change that could exclude firms “whose business model is to buy cryptocurrencies,” arguing they resemble investment funds rather than operating companies.
Saylor said the company is in “active discussions” with MSCI over the review.
Citing prudent liquidity management during market turbulence, analysts at TD Cowen cut their price target for Strategy from $535 to $500. They also reduced the company’s earnings multiple from 9x to 5x, highlighting increased volatility and leverage exposure.
Scaramucci praises Saylor’s Bitcoin strategy
On Dec. 1, Strategy announced the creation of a $1.44 billion U.S. dollar reserve to bolster liquidity following a decline in its market-implied net asset value (mNAV), a key ratio comparing enterprise value to Bitcoin per-share value.
Strategy's mNAV has dropped close to 1x, meaning the firm’s stock now trades nearly in line with its BTC holdings.
On Dec. 8, Strategy disclosed that it purchased 10,624 BTC for $962.7 million at an average price of $90,615, bringing its total holdings to 660,624 BTC worth $49.35 billion at an average of $74,696 per Bitcoin.
Reacting on X, Scaramucci praised Saylor’s approach:
“He’s the man. Builds a US dollar backstop and then gets back to selling equity to buy btc which further strengthens balance sheet. the equity sales are accretive (albeit barely) but v smart for his balance sheet --- and overall btc market. really smart stuff
MSTR was trading at $181.85 at press time, up 1.6% in a day.
By Pooja Rajkumari
