The CEO of Strategy, Phong Le, does not regret selling Bitcoin near $60,000, only to buy it back at a higher price weeks later.
In an interview with Bloomberg Crypto on Wednesday, Le said the move — apparently a "sell low, buy high" strategy — reflected changes in the company's balance sheet and financing costs, rather than a bet on Bitcoin's price.
"It was the right decision at the time to sell Bitcoin to fund our dividends," Le said. "And it's the right decision, right now, to sell MSTR shares at a premium to buy Bitcoin."
Strategy sold 6,916 BTC in four tranches between late June and mid-August, at a weighted average price of about $62,200; it then bought 4,603 BTC last week at an average price of $80,318, according to the company's Bitcoin holdings disclosure.
The company bought 4,603 BTC for $369.7 million in the week ending 30 August, paying an average of $80,318 per coin, according to a regulatory filing dated 31 August. It financed the purchase by selling MSTR shares, raising its reserves to 845,050 BTC, valued at roughly $65.4 billion.
However, Le said Strategy's decisions are guided by its balance sheet, not by Bitcoin's market price.
"We really don't make Bitcoin decisions based specifically on the price of Bitcoin," he said. "What did we do over the last two months while we weren't buying Bitcoin? We strengthened our balance sheet."
During the two-month pause in purchases, Strategy raised its assets to $72 billion — $65 billion in Bitcoin and about $7 billion in dollar reserves — and cut net debt from roughly $7 billion to zero, Le said.
The stronger balance sheet made it cheaper to issue MSTR shares and use the proceeds to buy Bitcoin, he said. When MSTR shares were trading at less favourable levels, selling Bitcoin was the best way for the company to meet its obligations. Strategy accelerated its purchases in February, even as its positions were underwater and doubts grew over its debt and preferred-share financing.
In May, Strategy dropped its "never sell" stance and instead committed to remaining a net buyer of Bitcoin. That shift came as STRC — its perpetual variable-rate preferred shares — fell below its $100 par value in June. Because Strategy adjusts STRC dividends to keep the shares trading near $100, the drop made issuing new shares less attractive and reduced a key source of funding for Bitcoin purchases.
"It's a two-way strategy. There will be times when it makes sense to sell Bitcoin," Le said. "Those 7,000 Bitcoins represent less than 1% of the total Bitcoin we hold."
Le said the sale drew disproportionate attention, despite representing less than 1% of Strategy's Bitcoin reserves, which have grown between 25% and 30% this year.
"An entity that only accumulates assets in a single direction isn't really a full operating company," he said. "Someone able to buy and sell Bitcoin, buy and sell common shares, buy and sell preferred shares — that's a true operating company and a two-way capital management company. That's what we are."
* Translated and edited with permission from Decrypt.
The gateway to bitcoin, the world's largest cryptocurrency, is MB. It's simple, secure and transparent. Stop putting off an investment with huge potential. Invest in just a few clicks!
