Company's Stance on Bitcoin Sales
Strategy CEO Phong Le has confirmed that the company would consider selling its Bitcoin holdings only if its stock price drops below its net asset value and it loses access to fresh capital. This significant revelation was made during a recent interview on the "What Bitcoin Did" podcast.
Le elaborated on the conditions under which selling Bitcoin would become mathematically justifiable. He explained that if Strategy's multiple to net asset value falls below one, and financing options become unavailable, unloading Bitcoin would be a necessary measure to protect what he terms "Bitcoin yield per share." He stressed that such an action would be a last resort, not a shift in the company's fundamental policy.
"I would not want to be the company that sells Bitcoin," Le stated, emphasizing that financial discipline must take precedence over emotion, especially when markets become challenging. Strategy's core business model relies on raising capital when its shares trade at a premium to its net asset value, and then using those funds to acquire more Bitcoin, thereby increasing the amount of Bitcoin held per share.
According to Le, when this premium disappears, selling a portion of the company's Bitcoin holdings to meet financial obligations can be a more palatable option for shareholders than issuing new equity, which would be more dilutive. Currently, the company faces an annual dividend obligation that is projected to be between $750 million and $800 million, particularly as recent preferred share issuances mature.
Le's strategy for funding these payouts primarily involves utilizing equity raised at a premium to its net asset value. He explained his approach, stating, "The more we pay the dividends out of all of our instruments every quarter, that's seasoning the market to realize that even in a bear market, we're going to pay these dividends. When we do that, they start to price up."
Long-Term Bitcoin Thesis and Treasury Dashboard
Beyond the intricate balance sheet mechanics, Le strongly defended the long-term investment thesis for Bitcoin. He highlighted its attributes as a scarce, non-sovereign asset with widespread global appeal. "It's non-sovereign, has a limited supply… people in Australia, the U.S., Ukraine, Turkey, Argentina, Vietnam and South Korea—everyone likes Bitcoin," he added, underscoring its international recognition and demand.
In response to Bitcoin's recent price decline and a broader sell-off in digital asset treasury stocks, Strategy launched a new BTC Credit dashboard last week. This initiative aims to provide reassurance to investors. The company asserts that its debt remains adequately covered even if Bitcoin's price falls to its average purchase price of approximately $74,000.
As the largest corporate holder of Bitcoin, Strategy maintains that it has sufficient dividend coverage for many decades, even if the Bitcoin price were to remain stagnant. The company reiterates that its financial obligations would still be met under such conditions.