Michael Saylor is once again raising the stakes, claiming that his company Strategy's (formerly MicroStrategy) total reserve capital now surpasses that of any financial corporation in the S&P 500 index. The only exception is Warren Buffett's empire, Berkshire Hathaway. This is an ambitious claim, but it requires careful analysis, as the calculation methodology here is far from as transparent as it might seem at first glance.
Numbers That Speak for Themselves
Strategy currently holds 845,050 BTC on its balance sheet. The first purchase was made back in August 2020, when the company acquired 21,454 bitcoins for $250 million. Today, this reserve is valued at approximately $65.2 billion. After a ten-week pause, on August 31, Strategy became active again, adding 4,603 BTC worth $370 million. Together with $6.7 billion in dollar-denominated assets, total reserves have reached an impressive $72.3 billion.
However, the official presentation for investors features a more modest figure of $15 billion. This difference arises because the company uses its own non-standard metric, "Total Reserve Capital," which excludes senior claims—liabilities repaid first, such as bank deposits—from the calculations. This is why JPMorgan's figure goes deep into negative territory (around -$1.35 trillion), making the comparison misleading.
Hidden Details and Market Reaction
In the chart, Strategy positions itself at $66 billion, which is only possible after excluding preferred shares from the calculations. Bank deposits, however, remain in the formula. This approach certainly inflates the ratio of reserves to senior liabilities, bringing it to 10.75. If preferred shares are included, the figure drops to 3.4. The company itself describes this metric in the presentation as "supplemental, with significant caveats."
Notably, amid this news, MSTR shares rose to nearly $140 but then corrected to $122.3 (-2.1% for the day), while bitcoin holds around $77,200. Investors have clearly appreciated the aggressive accumulation strategy, but the market remains volatile.
My take: Saylor masterfully manages the narrative, turning the company's balance sheet into a marketing tool. But comparing Strategy to banks using a metric that ignores their key liabilities is like comparing apples to oranges. As long as bitcoin rises, this strategy looks brilliant, but in a deep market correction, this "reserve cushion" may prove not so reliable. Investors should closely watch not the loud statements, but the actual capital structure.