Michael Saylor, executive chairman of Strategy (MSTR), addressed concerns regarding the company’s potential sale of bitcoin during a recent interview with CoinDesk at the Consensus conference in Miami. The discussion centered on the implications of using bitcoin sales to fund dividend obligations, which had raised eyebrows among investors.
Saylor dismissed the fears, describing the potential sale as “a big nothing burger” in economic terms. He clarified that if the company were to rely solely on bitcoin sales for dividends over the next year, it would actually end up acquiring more bitcoin than it sold. He emphasized that the liquidity of bitcoin, estimated between $20 and $50 billion, renders any potential dividend funding through bitcoin sales negligible.
In the conversation, Saylor elaborated on the metrics the company uses to navigate its financial decisions, which include weighing the benefits to shareholders against the impact on the balance sheet. He explained how the firm prioritizes trades that increase bitcoin per share, balancing equity and credit considerations.
When asked about the current market conditions, Saylor noted the possibility of capturing up to $2.2 billion in tax credits, highlighting the fluid nature of their financial strategies. He mentioned that decisions regarding bitcoin trades are made on a weekly and even daily basis, depending on market conditions.
Responding to criticisms that Strategy tends to buy bitcoin at peak prices, Saylor argued that the company’s strategy involves equity swaps that capitalize on market premiums. He explained that during periods of market rallies, the company can exchange shares for bitcoin profitably, which may create the appearance of buying at high prices.
Additionally, Saylor discussed the company’s preferred stock, known as Stretch or STRC, which is designed to be a perpetual instrument without a redemption obligation. He explained that this structure allows for greater market liquidity and flexibility, as it does not require immediate cash outlays like traditional bonds.
Despite recent fluctuations in STRC trading, Saylor expressed confidence in the product’s resilience, attributing any delays in recovery to the rapid expansion of supply following significant sales. He noted that the instrument’s design allows it to withstand market stress while maintaining stability.
In summary, Strategy’s recent activities include the purchase of 535 bitcoin for approximately $43 million, bringing the total investment in bitcoin to around $61.8 billion at an average cost of $75,540 per coin. Following these developments, MSTR shares saw a 1% increase in pre-market trading.
Michael Saylor addressed investor concerns about Strategy's potential bitcoin sales for dividends, emphasizing the negligible impact on the company's finances. He discussed the metrics guiding their financial decisions and defended the company's trading strategies against criticism.
Source: CoinDesk