Investment of 15 MSEK in Strategy Inc. for increased exposure and yield from Bitcoin
Fragbite Group AB (publ) (“Fragbite Group” or “the Company”) has acquired shares in Strategy Inc. (NASDAQ: MSTR) (”Strategy”) for SEK 15 million with the intention of broadening its exposure to Bitcoin and generating yield through utilising Strategy’s options trading market. The investment is made within the framework of the previously communicated objective to strengthen the capital structure with Bitcoin and establish yield by leveraging Bitcoin. Revenues from option sales will support core business operations and contribute to the Company's accumulation of BTC.
Under business area Bitcoin Treasury, Fragbite Group has acquired 10,245 shares in Strategy Inc. (“Strategy”), listed on NASDAQ under the ticker MSTR, at a total acquisition value of SEK 15 million. Strategy has the world’s largest known non-institutional holding of Bitcoin and is often considered a leader in BTC exposure. Through its investment in Strategy, the Company benefits from the volatility of the share to sell call options and participates in Strategy’s increase in BTC/share. The investment is therefore well aligned with the Company's objective of increasing Fragbite Group’s exposure to Bitcoin over time and generating recurring yield with Bitcoin as leverage. This investment is carried out now as the Company considers the price of Strategy favourable relative to their current assets and expected future value creation in the form of a continuous increase in BTC/share.
Call options are issued through so called Covered Calls, a well-established option method. The company will sell call options on Strategy shares and receive compensation for these, with the high volatility of the Strategy share providing good opportunities for recurring income. The sale of call options will be used when market conditions are favourable for the Company. Work has begun on evaluating different platforms to enable the secure sale of options. Revenue from the sale of options will support core operations within Gaming and Esports and be reinvested through the purchase of Bitcoin. The investment in Strategy thus contributes to continued steady growth for the Company's Bitcoin holdings.
"The purpose of the investment is to establish an income-generating component in the Company's treasury activities. The strategy is based on a combination of indirect Bitcoin exposure that grows over time via an established player, and a classic income-generating option method with a well-balanced risk profile. Fragbite Group maximises return on capital while strengthening the Company's core position in Bitcoin and supports both business operations and the accumulation of BTC, which altogether underscores our commitment to delivering shareholder value in the short and long term," says Patrik von Bahr, Bitcoin Treasury Director, Fragbite Group.