Strategy Considers Selling Bitcoin to Fund Dividends and Generate Tax Savings

• Strategy may sell part of its Bitcoin holdings to support preferred stock dividend payments.
• Phong Le said selective BTC sales could unlock nearly $2.2 billion in future tax savings.
• Strategy expanded its Bitcoin holdings to 818,334 BTC despite reporting a quarterly loss.

Strategy executives said the company may sell part of its Bitcoin holdings to fund dividend payments tied to its preferred-stock structure, marking the first time senior leadership has publicly discussed reducing the firm’s BTC position.

During the company’s first-quarter earnings call, Executive Chairman Michael Saylor stated that the firm wants to maintain flexibility across its capital structure as it expands its financing tools. According to Saylor, a limited Bitcoin sale could be used to “inoculate” the market and show that the company has additional options available for shareholder-related obligations.

Strategy CEO Phong Le also said the company would consider selling Bitcoin when such a move becomes accretive to shareholders. Le added that the company’s objective may include selling Bitcoin acquired at prices above current market levels to realize capital losses that could generate tax benefits.

Saylor said the company remains comfortable with its Bitcoin position despite discussing possible sales. He noted that creating additional optionality for the company could benefit equity investors as Strategy continues managing multiple financing instruments tied to its Bitcoin treasury model.

Le stated that realizing capital losses through selective Bitcoin sales could possibly unlock approximately $2.2 billion in tax savings. Companies are generally permitted to use capital losses to offset future taxable gains or carry them forward under existing tax rules.

Strategy currently holds 818,334 Bitcoin, representing approximately 3.9% of Bitcoin’s total supply. Based on current market prices, the holdings are valued at around $66.5 billion. The company acquired 89,599 Bitcoin in the first quarter and an additional 56,235 Bitcoin early in the second quarter.

The company reported a first-quarter operating loss of $14.5 billion, primarily linked to mark-to-market accounting adjustments associated with Bitcoin price movements during the reporting period. Strategy also posted a net loss of $12.5 billion for the quarter.

According to company disclosures, Bitcoin-per-share increased by approximately 18% year-over-year to 213,371 satoshis per share. Executives said the company is targeting a doubling of Bitcoin per share over the next seven years through its “digital credit” strategy associated with STRC.

Related: Peter Schiff Questions Strategy’s Bitcoin Model as Selling Debate Intensifies