Strategy CEO: Bitcoin Sale Considered Only If Stock Falls Below NAV and Funding Dries Up

• Bitcoin sales as last resort: MicroStrategy’s strategy focuses on holding Bitcoin long-term unless stock trades below NAV and capital access vanishes.

• Funding dividends through equity premiums: The company raises capital when shares outperform NAV to acquire more Bitcoin, boosting holdings per share.

• Debt coverage remains strong: Even if Bitcoin drops to $25,000, MicroStrategy’s obligations are manageable, with coverage extending decades at flat prices.

Discover MicroStrategy’s Bitcoin strategy amid market challenges: When would they sell holdings? Explore CEO insights on financial safeguards and long-term vision for investors.

What is MicroStrategy’s Bitcoin Selling Strategy?

MicroStrategy’s Bitcoin selling strategy is a contingency plan designed to safeguard shareholder value during extreme financial distress. CEO Phong Le explained that the company would only sell portions of its Bitcoin holdings if the stock price dips below net asset value and access to fresh capital evaporates. This approach ensures the protection of what Le terms “Bitcoin yield per share,” emphasizing a data-driven decision over emotional attachment to the asset.

In a recent interview on the What Bitcoin Did show, Le underscored that such a sale would represent a final measure, not a fundamental change in the firm’s commitment to Bitcoin as a core treasury asset. MicroStrategy’s model relies on leveraging stock premiums to NAV for capital raises, which fund additional Bitcoin purchases. When this premium vanishes, selective sales could become necessary to avoid more harmful equity dilution, all while prioritizing long-term holding in favorable conditions.

The company’s extensive Bitcoin portfolio, currently valued in the billions, positions it as the largest corporate holder of the cryptocurrency. This strategy has historically driven significant growth, with Bitcoin serving as a hedge against inflation and a scarce, non-sovereign store of value. Le’s comments reflect a disciplined balance between aggressive accumulation and prudent risk management, appealing to investors who value transparency in corporate treasury operations.

How Does MicroStrategy Plan to Handle Its Annual Dividend Obligations?

MicroStrategy faces substantial annual dividend commitments, estimated at $750 million to $800 million, stemming from a series of preferred shares issued earlier this year. CEO Phong Le detailed in his interview that these obligations will primarily be met through equity issuances when shares trade at a premium to net asset value. This method not only covers payouts but also allows the company to acquire more Bitcoin, enhancing the Bitcoin per share metric that underpins investor confidence.

Le highlighted the importance of consistent dividend payments to build market trust, even during downturns. “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,” he stated. Supporting data from the company’s financial reports shows robust dividend coverage ratios, with projections indicating sustainability for decades assuming stable Bitcoin prices.

Experts in financial markets, such as those from Bloomberg analysis, note that MicroStrategy’s dividend structure is innovative for a Bitcoin-centric firm, blending traditional finance with cryptocurrency exposure. This approach mitigates risks associated with volatile crypto prices by diversifying funding sources. For instance, if Bitcoin’s value remains at its average purchase price of around $74,000, debt servicing remains well-covered, according to internal metrics shared by the company. Even in a severe downturn to $25,000 per Bitcoin, the structure holds, demonstrating resilience backed by over 200,000 BTC in reserves.

Le further defended the overarching Bitcoin thesis, describing it as a globally appealing asset with limited supply and independence from sovereign control. “It’s non-sovereign, has a limited supply… people in Australia, the US, Ukraine, Turkey, Argentina, Vietnam and South Korea — everyone likes Bitcoin,” he added. This perspective aligns with reports from sources like BitcoinTreasuries.NET, which track corporate holdings and affirm MicroStrategy’s leading position without any immediate sale pressures.

Strategy’s Bitcoin holdings. Source: BitcoinTreasuries.NET

Bitcoiners have raised concerns about traditional institutions like JPMorgan potentially influencing markets against firms like MicroStrategy and other digital asset treasuries, though Le dismissed such claims as external noise. Instead, the focus remains on internal financial health and strategic capital deployment.

Frequently Asked Questions

When Would MicroStrategy Actually Sell Its Bitcoin Holdings?

MicroStrategy would sell Bitcoin only as a last resort if its stock falls below net asset value and funding options disappear, per CEO Phong Le’s statements. This protects Bitcoin yield per share and avoids dilutive equity issuances, ensuring decisions are purely financial rather than ideological, based on current market multiples and capital availability.

How Is MicroStrategy Managing Debt After the Recent Bitcoin Price Drop?

MicroStrategy is addressing debt concerns through its newly launched BTC Credit dashboard, which provides transparent metrics on obligations and coverage. The tool reassures stakeholders that dividends are covered for decades, even with Bitcoin prices flat or declining to $25,000, by highlighting strong reserve buffers and sustainable funding strategies tailored for voice-activated queries like this one.

Key Takeaways

• Contingent Selling Policy: MicroStrategy commits to holding Bitcoin unless stock underperforms NAV and capital dries up, prioritizing mathematical justification.
• Dividend Funding Innovation: Premium equity raises fund $750-800 million annual payouts, reinforcing market confidence in bear conditions while expanding BTC reserves.
• Long-Term Resilience: BTC Credit dashboard shows debt manageability at low prices, underscoring global appeal and scarcity as key to the company’s strategy.

Conclusion

MicroStrategy’s Bitcoin selling strategy exemplifies a balanced approach to corporate treasury management, where CEO Phong Le’s insights reveal a commitment to holding assets amid volatility while preparing for worst-case scenarios. With robust dividend coverage and tools like the BTC Credit dashboard enhancing transparency, the firm continues to lead in Bitcoin adoption. As markets evolve, investors should monitor NAV multiples and capital access, positioning MicroStrategy for sustained growth in the digital asset landscape—stay informed for future updates on these developments.