MicroStrategy (Strategy) is facing criticism after its Co-Founder Michael Saylor announced a controversial revision to the firm’s equity issuance policy. The change eliminates a longstanding rule that barred the company from selling stock below 2.5 times its net asset value (mNAV), a safeguard designed to protect shareholders from dilution.
Saylor said the move gives MicroStrategy more flexibility as he tries to ease Stock sale rules as the Bitcoin (BTC) premium shrinks, but investors felt blindsided, calling it a betrayal of recent promises and trust in leadership shaken.
The most vocal criticism came from WhaleWire CEO and financial analyst Jacob King, who wrote, “Saylor pulled the rug. I’ve been warning people for months that he is a sleazy, corrupt fraud. He lied to investors and promised $MSTR wouldn’t issue stock below 2.5x mNAV.”
King also added that MicroStrategy’s stock premium has collapsed from 3.4x to 1.6x since November 2024, likely prompting the shift. He shared, “What does it mean? He can now dilute shareholders anytime it benefits him. This was never about Bitcoin; it’s about Saylor cashing in.”
Backlash from Strategy Shareholders
Others echoed King’s concerns, with some investors pointing to statements made during MicroStrategy’s recent earnings call, where Saylor reportedly reaffirmed the 2.5x mNAV issuance limit. The updated policy now allows for equity sales at management’s discretion—even without a clear valuation benchmark. Adam Simecka, Founder of MannaBitcoin and HandsFreeBTC said, “Not happy about this. This isn’t what was communicated 2 weeks ago on the earnings call.”
The backlash centers not only on the policy change but on what it symbolizes: a possible erosion of the company’s commitment to shareholder value in favor of aggressive BTC accumulation. Some observers view it as a typical Wall Street maneuver wrapped in a Bitcoin narrative.
Even long-time supporters of MicroStrategy’s Bitcoin-first strategy appeared conflicted. As prominent X user based16z put it, “He’s folding. This may be better since the old announcement guaranteed death? Also, switching up doesn’t inspire confidence.”
Market analyst Daan Crypto Trades also noted the so-called “Saylor bid” is now potentially back in play, referring to the company’s ability to raise funds through equity sales to buy more Bitcoin, regardless of price.
Broader Risks than Just Share Dilution
Beyond the governance concerns, critics are warning of broader financial risks. Several analysts have argued that removing the issuance safeguard could exacerbate exposure to Bitcoin volatility and damage long-term shareholder value.
“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 wrote.
While MicroStrategy’s prior guidance technically left room for policy changes, the lack of transparency and sudden shift in strategy has left investors reeling. At its core, the controversy reflects a growing divide between Saylor’s unwavering Bitcoin evangelism and shareholders who are now feeling sidelined.
Also Read: Bitcoin Price at $115K: Support or Breakdown Ahead?
