The latest filings from Strategy show that the company sold 32 bitcoins last week, cashing out approximately $2.5 million at an average selling price of $77,135 per bitcoin. After the sale, its bitcoin holdings decreased to 843,706 bitcoins, valued at approximately $61 billion based on current prices.
Income is used for preferred stock distribution.
The company disclosed that the proceeds from this Bitcoin sale will be used to fund preferred stock distributions. This indicates that Strategy has begun using part of its Bitcoin holdings to support capital structure arrangements, rather than holding them solely for the long term.
The report noted that during the same period as the Bitcoin sale, Strategy issued $128 million in common stock but did not issue its core preferred stock product, STRC. This product currently offers an annualized dividend of 11.5%, paid monthly.
The management has already signaled ahead of time.
This sale is seen as further evidence of Strategy’s gradual departure from its long-standing “never sell Bitcoin” stance. During the Q1 earnings call on May 5, Chairman Michael Saylor indicated that the company might sell a portion of its Bitcoin to fund dividends, signaling its intentions to the market.
Strategy's President and CEO, Phong Le, also stated that the company would sell Bitcoin whenever it benefits the company, noting that such actions could be used to acquire U.S. dollars or support debt arrangements, provided they enhance the per-Bitcoin value.
Bitcoin declined after the announcement.
After the news broke, Bitcoin briefly dropped to just above $72,000, down about 2.4% for the day. The market’s focus isn’t just on how much was sold, but on the fact that Strategy has publicly accepted selling Bitcoin under certain circumstances.
In the week prior to this sale, Strategy also utilized approximately 61% of its dedicated cash buffer, amounting to $1.38 billion, to repurchase $1.5 billion in convertible bonds. Combined with its latest move, the company is now more actively adjusting the allocation among its holdings of crypto assets, cash, and financing instruments.
Additional information: This is not the first time Strategy has sold Bitcoin. In December 2022, the company sold 704 Bitcoin and repurchased 810 two days later, primarily for tax-loss harvesting purposes.