The CEO of Strategy says that the sale of 32 BTC was a test, not a need for money
Strategy CEO Phong Le said the company’s sale of 32 BTC is a test of its process and not a sign that the company needs cash for dividends.
Summary
- Phong Le said the sale of Strategy’s 32 BTC tested internal plans, not the need for dividend funding.
- The strategy still bought 1,550 BTC after that, increasing the share price to 845,256 Bitcoin on June 7.
- Saylor’s CEBE BPS metric changes the investor’s focus on debt, preferred stock and common stockholder risk.
In a June 13 interview, Le said the sale helped “inject the market” and gave Isu a way to test how internal Bitcoin sales would work.
The company sold 32 Bitcoins between May 26 and May 31 for about $2.5 million, according to its SEC filing. The average selling price was $77,135 per BTC. The filing said the proceeds are expected to fund a preferred stock distribution, leading some investors to question whether Strategy might need to sell more Bitcoin later.
The strategy says that sales are not tied to equity pressure
Le recoiled from that reading. He said Strategy did not sell Bitcoin because it needed to meet dividend cash obligations. He said the company still has other financing channels, including equity and preferred stock instruments, to support its capital structure.
He also said that the sale resulted in a tax loss that may pay related taxes in future periods. The point, according to Le, was to test the process, reduce the shock of the market about the idea of selling, and keep the company ready if a small sale later benefits the common shareholders.
The CEO said Strategy will use math more than ideas when choosing between selling Bitcoin and issuing stock. If the sale of Bitcoin improves Bitcoin per share for common owners, the company may choose that option. If the shared output works better, it can use that route instead.
Forced selling remains a crime
Le also talked about the possibility of a forced sale of Bitcoin. He said that the most reasonable case would involve about $3.5 billion in commitments due to 2028. If Bitcoin falls significantly and the share price Strategy remains weak, the company could sell Bitcoin to meet those commitments.
Le described that result as a “edge case.” He said Strategy could refinance or convert those bonds into equity. That means that selling Bitcoin is not the only option available when market conditions turn bad.
As previously reported by crypto.news, Strategy bought 1,550 BTC for approximately $101.3 million between June 1 and June 7 after selling 32 BTC. The purchase raised its total value to 845,256 BTC. The strategy also increased its US dollar reserves to $1 billion.
The Saylor metric places risk on concentration
This debate comes as Michael Saylor tried to clarify that investors should measure the Strategy’s Bitcoin exposure. Earlier today, crypto.news reported that Saylor said Bitcoin Per Share tracks common equity growth, while Common Equity Bitcoin Exposure BPS, or CEBE BPS, tracks Bitcoin exposure after debt and preferred stock claims.
Saylor said the CEBE BPS is a secure risk metric. That’s important because Strategy’s Bitcoin model now includes debt, preferred stock and equity costs. The gap between Bitcoin per share and CEBE BPS can widen when higher claims increase.
