President Donald Trump has again attacked stock buybacks as 'fake,' arguing they inflate share prices without boosting real economic capacity. His latest comments target defense contractors, but the debate also highlights a contrasting approach: MicroStrategy's strategy of issuing shares to buy Bitcoin, which has created a different path to higher valuations.
Trump's criticism of buybacks is not new. In January, he signed an executive order barring underperforming defense contractors from repurchasing shares or paying dividends until production improves. He wants companies like Lockheed Martin, Northrop Grumman, and RTX to spend cash on plants, equipment, and faster output instead. His renewed comments this week have rattled defense stocks, underscoring the ongoing policy pressure.
MicroStrategy's Opposite Playbook
MicroStrategy, now renamed Strategy, takes the opposite approach. It does not buy back common stock. Instead, it sells new shares and preferred stock, using the proceeds to purchase Bitcoin. This dilution-and-debt model has built a stockpile of over 845,000 BTC, the largest held by any public company, representing more than 4% of all Bitcoin in circulation. CEO Michael Saylor frames each raise as a way to grow Bitcoin per share, even as the share count increases.
The company has also bought back its own debt, repurchasing convertible notes at a discount this year, and leaned on preferred stock issuance to avoid adding senior loans. The model relies on a premium: MicroStrategy issues stock above the value of its Bitcoin holdings, buys more coins, and lifts holdings per share, which can sustain the premium.
The Premium Dilemma
That premium has thinned in 2026. With Bitcoin trading near $64,360, the company's holdings sit close to the average price it paid. The stock has fallen by more than half over the past year, and its market value has slipped toward $40 billion. When the premium fades, new share sales add little value, and the same dilution that powered gains now offers thinner support, a pattern visible during recent Bitcoin sell-offs.
Both stories turn on one question: whether a company builds real value or simply moves its share price. For MicroStrategy, the answer may rest on whether Bitcoin climbs back above its cost and revives the premium that makes its model work.