Strategy Chairman Michael Saylor said that his company is not interested in acquiring other Bitcoin Treasury companies, because doing so is full of uncertainty, although he has not ruled it out completely.
“Typically, we have no plans to pursue M&A (Merger and Acquisition) activity, even though it would be potentially accretive,” Saylor said Investors on Thursday during the Strategy’s Third-Quarter Earnings Call
“There’s just a lot of uncertainty, and these things tend to stretch out for six to nine months or a year,” he added. “An idea that sounds good when you start out may still not be a good idea six months later.”
Analysts have suggested that Bitcoin (BTC) Treasury companies may need to start buying each other as the number of players in the sector increases and companies compete to differentiate themselves from their rivals.
Hard work was the first bitcoin Treasury Company to perform a merger, announcing this late September Take its rivalSemler Scientific, in an all-stock deal, resulting in the combined firm holding 11,006 BTC.
That would give the effort the 12th-largest bitcoin holdings among public companies, behind Tesla. Strategy, by comparison, has 640,808 BTC, the largest holding of any company.
Never say never: Saylor
Saylor did not completely rule out an acquisition, however, which provides Strategy Some wiggle room to change its mind on the subject.
“I don’t think we’re going to say ‘We’ll never, no, never, ever,’ but what we’re going to say is the plan, the strategy, the focus is to sell the digital credit, improve the balance sheet, buy bitcoin and talk to the credit and the equity investors,” Saylor said.
Strategy CEO Phong Le added that mergers and acquisitions for software companies, the strategy’s core business, are “very difficult.”
“There’s always something hiding behind what you really think you’re buying,” he said. “I would say the same thing about Treasury companies taking Bitcoin.”
The Bitcoin focus of the strategy is easier to study
Saylor said the multiple Bitcoin purchases of the strategy over the years allowed the public to “immediately calculate whether it was accretive or dilutive,” saying they were “generally all accretive.”
“Our focus is to make high-speed transparent digital transactions and sell digital credit and buy bitcoin,” he said. “We think it’s a big advantage of the company that the business model is very transparent, predictable, and clear because the business model is predictable.”
That model, Saylor argued, makes it easy for equity and credit analysts to make decisions about and assess company quality.
S&P Global Ratings on Monday gave a strategy A “B-” credit rating, which puts it in the same speculative, non-investment-grade category as junk bonds, but said the company’s outlook is stable.
Le said the strategy does not get any credit for its Bitcoin holdings in the rating, which will be deducted from the company’s equity.
He said for the company’s rating to improve, it would be “appropriate at some point in time to treat Bitcoin differently, and as a capital asset.”
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