Strategy (MSTR) Stock: CEO Explains When Company Would Sell Bitcoin

TLDR

• Strategy CEO admits company could sell Bitcoin if stock drops below net asset value and funding dries up
• Company currently trades at 0.96 mNAV, below the value of its Bitcoin holdings
• Strategy must pay $750-$800 million annually in preferred share dividends
• Michael Saylor’s “green dots” tweet fueled speculation about possible Bitcoin sales
• The company holds around 650,000 BTC, making it the largest corporate Bitcoin owner

Strategy CEO Phong Le made waves by confirming the company might sell Bitcoin under certain conditions. In an interview with What Bitcoin Did, Le said sales would only happen if the stock falls below net asset value and capital markets shut down.

MicroStrategy Incorporated, MSTR

This marks a departure from Strategy’s core philosophy of holding Bitcoin forever. The company has built its reputation on accumulating Bitcoin without selling. Now Le admits financial math could override that commitment.

The key metric is mNAV, or multiple to net asset value. This ratio compares Strategy’s stock price to the value of Bitcoin it holds. When mNAV drops below 1.0, the stock trades for less than the Bitcoin backing it.

Strategy’s mNAV currently sits at 0.96. That puts the company in uncomfortable territory. Le said if this ratio stays depressed and the company loses access to capital, selling Bitcoin becomes “mathematically justified.”

Fixed Costs Create Pressure

Strategy faces a serious cash flow challenge. The company owes $750-$800 million per year in dividend payments on preferred shares. These payments come due regardless of Bitcoin’s price or market conditions.

Le’s plan involves covering dividends by selling stock when shares trade above net asset value. But that only works when investors pay a premium for Strategy stock. Right now, they’re paying a discount.

The CEO explained that consistent dividend payments help build market confidence. “The more we pay the dividends out of all of our instruments every quarter, that’s seasoning the market,” Le said. He believes this track record will help the preferred shares maintain value.

If Strategy can’t raise money through stock sales, Bitcoin becomes the backup funding source. Le framed this as protecting shareholders from dilution. Selling Bitcoin would hurt less than flooding the market with new shares.

Saylor’s Cryptic Message

Michael Saylor added confusion with a November 30th tweet about “green dots.” His Bitcoin tracker has always used orange dots to mark purchases. Green dots would presumably signal something different.

The crypto community immediately assumed green means sales. Some analysts think Saylor is preparing investors for a policy change. Others believe it might indicate stock buybacks rather than Bitcoin liquidation.

The timing raised eyebrows. Bitcoin recently fell below $90,000, putting pressure on Strategy’s financials. Combined with Le’s podcast comments, Saylor’s tweet sparked concerns about the company’s stability.

New Dashboard Addresses Fears

Strategy launched a credit dashboard last week to calm investor worries. The tool shows the company can handle its obligations even if Bitcoin prices stagnate or drop further.

According to Strategy, its debt remains manageable if Bitcoin falls to the company’s average purchase price of $74,000. The company claims it could survive Bitcoin dropping to $25,000.

Le defended Bitcoin’s long-term value proposition during his interview. He pointed to global demand across multiple countries and Bitcoin’s fixed supply as reasons for optimism.

Strategy’s business model requires access to capital markets. The company raises money when its stock trades at a premium, then buys more Bitcoin. This increases Bitcoin per share. When the premium vanishes, the model stops working.

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