Strategy Chairman Michael Saylor told investors that the company is not considering acquiring a fellow Bitcoin treasury company, saying such deals often take too long and have too much uncertainty.
Strategy focus remains on buying Bitcoin
According to Strategy’s third-quarter earnings call, Saylor said the company has “no plans to move forward with M&A,” even if it initially looks like deals will grow.
He cautioned that deals can span “six to nine months or even a year,” and that ideas that look good at first may become unattractive after a few months.
Strategy’s stated plan is straightforward: sell digital credit, strengthen its balance sheet, buy Bitcoin, and keep investors informed.
Thaler argued that that clarity makes it easier for analysts to see the company’s performance and for the market to make decisions.
M&A activity is increasing elsewhere
According to reports, Strive went ahead with the deal in late September, agreeing to acquire rival Semler Scientific in an all-stock deal, leaving the combined company with 11,006 BTC.
This holding puts Strive among the largest stockholders after major companies such as Tesla — roughly the 12th largest. In contrast, Strategy’s holdings remain massive at 640,808 BTC, the largest holdings reported by a public company.
The numbers highlight why strategies feel little pressure to consolidate, even though their primary objective is accumulation.
Von Reh, CEO of Strategy Inc., warned that acquiring other companies often comes with hidden surprises. He said software M&A is “very difficult,” adding that the same caution applies to the acquisition of a Bitcoin treasury business.
Those comments came alongside a more cautious policy from Mr. Saylor, who said the company would never say no to acquisitions but that its current focus was clear and narrow.
How does the market view the strategy?
S&P Global Ratings last week gave Strategy a B grade, or “junk” rating, placing it in the speculative, non-investment grade category.
The rating agency said much of the company’s Bitcoin holdings were not counted as capital, which affected its final score.
Lee suggested that if Bitcoin were treated differently on a company’s balance sheet, for example if it were recognized as a capital asset, credit metrics could change, which would likely impact how ratings are assessed.
Credit ratings don’t change the drivers of business, Thaler said. He pointed out that the company’s model is predictable and transparent because each Bitcoin purchase can be measured and shown to investors.
Corporate executives use this predictability to argue that accumulation outweighs acquisition of competitors at this time.
Featured image from Unsplash, chart from TradingView
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