Strategy CEO and President Phong Le said in a Bloomberg Television interview that the company will not stop buying Bitcoin: “We’re not going anywhere—my goal is to become Bitcoin’s biggest buyer in the foreseeable future.” Le said the only time it would consider debt-related risks is if Bitcoin falls to $8,000–$10,000; the company is “very comfortable” with its balance sheet right now. Bitcoin is currently trading at about $65,000.
Phong Le: Goal is to become the biggest Bitcoin buyer in the foreseeable future
In a Bloomberg Television interview, Phong Le’s comments on Strategy’s Bitcoin strategy showed a clear stance: “We’re not going anywhere; my goal is to become Bitcoin’s biggest buyer in the foreseeable future.” On downside risk for Bitcoin, he said: “When the price of Bitcoin falls to around $8,000 or $10,000, then we need to consider the risks related to debt. Before that, we are very confident in the balance sheet.”
Le also noted that during the 2022 bear market, the company went through similar downside conditions and continued accumulating Bitcoin, and expects it will do so going forward. Since the week of June 22, Strategy has not bought any more Bitcoin.
Strategy cash reserves rise to $3 billion
According to reports, Strategy has recently taken the following financial actions: it sold more than $215 million worth of Bitcoin; and last week raised about $467 million by selling common stock, bringing cash reserves to roughly $3 billion—enough to cover about two years of preferred stock dividends.
Le explained that the above actions were a response after preferred shareholders highlighted the importance of short-term liquidity, and that the recent Bitcoin sales also demonstrated the liquidity of the company’s Bitcoin holdings.
STRC preferred stock is currently about $88
According to reports, Strategy’s STRC perpetual preferred stock is currently trading at about $88, below the $100 par value; since May, the STRC share price has been below par.
Le said the plan is to issue more shares once STRC returns to its $100 par value, with proceeds used to buy more Bitcoin: “When the STRC share price recovers to par, we will issue and buy Bitcoin. This is an important part of our capital plan. Over time, issuing more preferred stock will greatly increase the value of Bitcoin per share, thereby increasing returns to shareholders.”
After Strategy’s mNAV multiple fell below 1 last month, it has since rebounded to about 1.02; Le also emphasized that as long as the company prices above Bitcoin net asset value, it can issue more shares.
FAQ
When does Strategy CEO say it needs to worry about debt risk?
In a Bloomberg Television interview, Phong Le said Strategy only needs to begin considering debt-related risks when Bitcoin’s price falls to around $8,000–$10,000. Bitcoin is currently trading at about $65,000, and the company is “very comfortable” with its balance sheet.
What is Strategy’s current cash reserve, and where does it come from?
According to reports, Strategy’s cash reserves are currently about $3 billion, enough to cover about two years of preferred stock dividends. The sources include selling more than $215 million worth of Bitcoin, as well as raising about $467 million through the sale of common stock last week.
What is the current status of STRC preferred stock, and what plans does the company have?
According to reports, STRC is currently trading at about $88, below the $100 par value, and has remained below par since May. CEO Le said that once STRC returns to its $100 par value, the company will issue more preferred shares, and the proceeds will be used to buy more Bitcoin.
