Michael Saylor, CEO of Strategy (formerly MicroStrategy), claims that the company's total reserve capital now exceeds that of any financial corporation in the S&P 500 index. The only exception is investment giant Berkshire Hathaway.
However, it is important to understand: this estimate is based on the company's own methodology, which raises questions among analysts. In Strategy's official presentation to investors, a more modest figure appears — $15 billion.
How Strategy reached this level
On Strategy's balance sheet — 845,050 BTC. The company acquired its first batch in August 2020: for $250 million, it received 21,454 bitcoins. Today, these coins are valued at approximately $65.2 billion. Purchases resumed on August 31 after a 10-week pause — the company then added 4,603 BTC for $370 million.
Taking into account $6.7 billion in dollar-denominated assets, total reserves reached $72.3 billion. Notably, independent experts confirm this figure: CEO Phong Le estimated reserves at approximately $72 billion. Le also noted that the company has no net leverage — dollar assets of $6.714 billion almost completely cover debt of a similar size.
A flawed metric
The Total Reserve Capital indicator, introduced by Strategy, does not account for senior claims — liabilities that are repaid first. For banks, these include deposits, which is why for JPMorgan this indicator goes to approximately minus $1.35 trillion.
On Strategy's chart, the indicator is $66 billion. The presentation from August 30 shows $21.5 billion in senior claims, of which $14.8 billion are preferred shares, and net reserves — $50.7 billion. The figure of $66 billion is obtained only when preferred shares are excluded from the calculation, while bank deposits remain in the formula.
This approach inflates the ratio of reserves to senior liabilities: on the chart it is 10.75, but when preferred shares are included, it drops to 3.4. Strategy itself calls this indicator a "metric with significant caveats."
For comparison: Berkshire's report shows $365.5 billion in cash and treasury bonds as of June 30. This figure can be verified, but the company's position in the ranking cannot, which highlights the subjectivity of the approach.
My view: While the market focuses on Saylor's ambitious statements, investors should critically evaluate corporate metrics. Strategy's strategy of accumulating bitcoin is impressive, but manipulations with reserve calculations can be misleading regarding the company's real financial stability. In a weak market, this is especially important: MSTR shares already show higher volatility than bitcoin itself, which indicates increased risks for shareholders.