MicroStrategy added 37 bitcoin between May 26 and July 26. Last week it sold 1,638 in seven days. The company now holds less Bitcoin (BTC) than it did in spring.
Michael Saylor says Strategy expects to stay a net buyer. Its own filings show the buying stopped months ago.
The Stack Is Going Backwards
Strategy reported 843,738 BTC on May 26. Two months later, on July 26, it reported 843,775. That is a gain of 37 coins.
Then came Monday’s filing. It shows 842,138 BTC as of August 2.
The company is now 1,600 coins below where it stood in May. Ten weeks have passed with no net buying at all.
Saylor addressed the question directly on August 1, when he shut down a viral sale claim.
“We have never had a “never sell” policy. The program does not require any BTC sale, and we expect to remain a net buyer of Bitcoin over time,” the MicroStrategy chair stated.
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A $400 Million Dividend Bill
The MicroStrategy Bitcoin sale last week was not opportunistic. It paid a bill.
Strategy owes cash to holders of its preferred shares. Those pay a fixed dividend every quarter.
That cost reached $400.7 million in the second quarter. A year earlier it was $49.1 million. The bill is more than eight times larger.
Dividends and interest now run roughly $1.76 billion a year.
So the coins go out the door. Strategy sold $218.4 million of bitcoin this year through July 26. Last week added $104.7 million more.
Almost a third of the year’s selling happened in that one week.
Selling at a Loss to Buy at a Discount
Here is the trade. Strategy sold bitcoin at $63,957 a coin. Its average cost is $75,419. That is a loss of about $11,500 each.
It used half that cash to buy back 912,143 STRC shares. STRC is a Bitcoin-backed preferred share that pays 12% a year.
Each share is meant to be worth $100. Strategy paid $89.02.
So the company took a loss on bitcoin to capture an 11% discount on its own debt-like shares. Every share retired cuts the dividend bill for good.
It also sold 3,011,361 of its own ordinary shares, raising $290.6 million. Meanwhile a $1 billion approval to buy those shares back sits unused. That is the trade-off MSTR investors face.
“Strategy is evolving from one-way capital issuance to active capital management,” Phong Le, president and chief executive of Strategy, in the June 29 release
Bitcoin trades near $62,468, roughly half its October record. Strategy still owns more of it than any other company.
But the direction has changed. The next filing lands in a week.