Bitcoin treasury company Strategy has completed another Bitcoin sale, selling 1,690 BTC for $108.6 million, and using the proceeds to repurchase $109 million of its STRC preferred stock.
The company also sold $653 million in MSTR shares, using the proceeds to increase its dollar reserve by $650 million.
Strategyโs Latest Bitcoin Sale
The Michael Saylor-founded company disclosed the sale in an updated filing with the Securities and Exchange Commission (SEC). The sale is the latest by the Bitcoin treasury company to manage its dividend and interest obligations and leverage a portion of its holdings to fund a $5 billion reserve.
According to the filing, Strategy sold 1,690 BTC for $108.6 million, and repurchased $109 million worth of its STRC preferred stock. It also sold $653 million in MSTR common stock, using the proceeds to increase its dollar reserve.
Strategy swore by its Bitcoin purchases, spending billions to become the largest publicly traded holder of the flagship cryptocurrency, and spawning several other Bitcoin treasury companies. However, Strategy has pivoted away from its buy-and-hold approach in recent months due to macroeconomic and geopolitical headwinds. The company concluded a small sale of around 704 BTC in 2022. However, it switched to regular sales in late May and June, starting with a 32 BTC sale. It sold 3,588 BTC in late June and early July, and another 1,638 BTC at the beginning of August. The August 10 sale takes Strategyโs Bitcoin holdings down to 840,447 BTC.
Repurposing Its Bitcoin Holdings
Strategy has strategically sold BTC as its priorities pivot to meeting dividend, interest, investor, and capital obligations during a difficult phase for the broader market. The change in the companyโs approach has been driven by a substantial decline in BTCโs value, forcing it to abandon its accumulation model to manage its balance sheet, including building a cash reserve and strategic sales to meet dividend obligations.
CEO Phong Le stated during a CNBC interview in May that Strategy could sell some of its Bitcoin holdings if it benefits shareholders.
โAt the point where selling Bitcoin versus selling equity to pay a dividend is better for our bitcoin-per-share, we will do it.โ
Saylor echoed similar thoughts, but stressed that Strategy would never be a โnet-sellerโ of Bitcoin, a distinction made after intense criticism of the companyโs selling.
โI’m very famous for saying ‘never sell your Bitcoin.’ That’s why the internet went crazy when we said we might sell it. But if I was being more precise: never be a net seller of Bitcoin. It just wouldn’t have been so viral.โ
STRC Preferred Stock Declines
One of the primary drivers of Strategyโs recent selling is STRCโs declining share value. STRC, Strategyโs preferred stock, fell significantly below $100, hampering the companyโs ability to issue new stock and fund Bitcoin acquisitions.
Strategy has attempted to get STRC back to $100 by introducing a new capital management framework that allows it to sell Bitcoin, build a cash reserve, and repurchase STRC.
Strategy has sold 6,948 BTC worth $432.5 million since May, using the proceeds to fund dividend and interest obligations. It introduced its Digital Assets Capital Framework in June, formalizing its strategy to sell a portion of its Bitcoin holdings. The framework allows the company to sell up to $1.25 billion in BTC to replenish its Dollar reserve, fund interest payments, dividends, and share buybacks.
Bitcoin Remains Primary Treasury Asset
Despite an uptick in selling, BTC remains Strategyโs primary reserve asset. The company currently holds 840,447 BTC, worth around $53.6 billion at current prices.
Le has insisted that Strategy will resume Bitcoin purchases over the course of the year, stating in a Fox interview,
โWeโll get back to buying more Bitcoin throughout the course of the year.โ
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
