Strategy weighs Bitcoin sale as shares come under pressure
The Bitcoin-heavy company said it may sell up to $1.25 billion of the token to raise cash, fund payouts and buy back preferred shares.
By Daniel Okafor · Business Editor
2 min read
Strategy said Monday it may sell as much as $1.25 billion of its Bitcoin holdings, a shift for a company built around buying and holding the token. The plan is aimed at adding cash, funding investor payouts and supporting preferred-share buybacks as its securities trade under pressure, according to Fortune and company statements.
The company said proceeds from any Bitcoin sales could go toward cash reserves, dividends and repurchases, while also helping it avoid issuing more common equity, Fortune reported. Strategy also outlined changes to its reserve and dividend policies and authorized up to $1 billion in buybacks of its preferred share products, according to Fortune.
The move marks a change in tone for Strategy, which has become one of the best-known corporate buyers of Bitcoin. Michael Saylor, the company’s executive chairman, has long argued for holding the cryptocurrency, telling investors last October: “You do not sell your Bitcoin,” Fortune reported.
Saylor said in a statement Monday that “Strategy remains committed to Bitcoin as its primary treasury reserve asset.” Fortune reported that the company sold $2.5 million of Bitcoin in June before announcing the larger possible sale program.
Strategy’s common stock has fallen 44% over the past year, Fortune reported. Its STRC preferred share, which Saylor had described as having “money-market-level stability,” has also dropped; Fortune reported that STRC, designed to be pegged to $100, closed Friday near $74.
Investors reacted positively after the announcement. Fortune reported that Strategy shares rose nearly 3% Monday morning to about $86, while STRC gained roughly 4% and traded near $79. Bitcoin briefly reached about $60,600 before giving back some of the move, according to Fortune.
Saylor co-founded the company in 1989, when it was known as MicroStrategy, Fortune reported. The business began as an enterprise software company before adopting Bitcoin as its main treasury reserve asset in 2020, starting with a $250 million purchase motivated by concerns about the value of the U.S. dollar, according to Fortune.
Strategy now owns about 4% of all Bitcoin supply, Fortune reported. That position has made the company a proxy for Bitcoin exposure in public markets, but it has also tied Strategy’s balance sheet and investor sentiment closely to the price of the token.
Fortune reported that Strategy’s approach inspired other public companies to load up on cryptocurrencies in hopes of boosting their shares. That trade has weakened over the past year, with Solmate losing nearly all of its value, according to the Financial Times, and Cantor Fitzgerald’s BSTR Bitcoin vehicle working to keep a SPAC deal alive as investor demand faded, according to Bloomberg.
This story draws on original reporting from Fortune.