Strategy CEO Phong Le said he has no regrets about the company selling Bitcoin near $60,000 and then buying it back at a higher price weeks later.
Speaking to Bloomberg Crypto on Wednesday, Le said the move that appeared to be a “sell low, buy high” trade was tied to changes in Strategy’s balance sheet and financing costs, not to a call on Bitcoin’s price.
Bitcoin sale funded STRC dividends
“It was the right trade at the time to sell Bitcoin to fund our STRC dividends,” Le said. “It’s the right trade at this point in time to sell MSTR at a premium to buy Bitcoin.”
According to the company’s Bitcoin ledger, Strategy sold 6,916 BTC in four tranches from late June through 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.
An Aug. 31 regulatory filing said the company spent $369.7 million to acquire 4,603 BTC in the week ending Aug. 30, paying an average of $80,318 per coin. The purchase was financed through sales of MSTR shares and brought Strategy’s holdings to 845,050 BTC, worth about $65.4 billion.
Le says Bitcoin price was not the deciding factor
Le said Strategy’s decisions are not based on Bitcoin’s market price alone.
“We don’t really make decisions on Bitcoin specific to Bitcoin price,” he said. “What did we do over the last two months while we were not buying Bitcoin? We shored up our balance sheet.”
During that two-month pause, Strategy increased its assets to $72 billion, including about $65 billion in Bitcoin and about $7 billion in dollar reserves, while cutting net debt from roughly $7 billion to zero, Le said.
He said the stronger balance sheet made it cheaper for the company to issue MSTR shares and use the proceeds to buy Bitcoin. When MSTR traded at less favorable levels, selling Bitcoin was the better option for meeting the company’s obligations.
Financing shifts changed the company’s pace of buying
Decrypt reported that Strategy accelerated its purchases in February even as its holdings were underwater and questions were building around its debt and preferred-share financing.
In May, the company dropped its “never sell” stance and instead said it would remain a net Bitcoin buyer. That change came after STRC, its variable-rate perpetual preferred stock, fell below its $100 stated value in June.
Because Strategy adjusts STRC’s dividend to keep the shares trading near $100, that decline made additional stock issuance less attractive and weakened a key source of funding for Bitcoin purchases.
A two-way capital strategy
“It’s a two-way strategy. There will be times when it makes sense to sell Bitcoin,” Le said.
He added that the sale drew outsized attention even though the roughly 7,000 BTC sold amounted to less than 1% of Strategy’s total Bitcoin holdings. He also said the company’s Bitcoin position has increased by 25% to 30% this year.
“A one-way accumulator isn’t really a full operating company,” Le said. “Somebody who is able to buy and sell Bitcoin, buy and sell equity, buy and sell preferreds—that’s really a true operating company and a two-way capital management company. That’s what we are.”