Strategy confirms it may sell bitcoin as a 'last resort'

Source: Exame Original Title: Strategy confirms it may sell bitcoin as a 'last resort' Original Link: https://exame.com/future-of-money/strategy-confirma-que-pode-vender-bitcoin-como-ultimo-recurso/ An investment strategy would only consider selling bitcoin if its shares fell below net asset value and the company lost access to new capital, CEO Phong Le stated in a recent interview.

I told the What Bitcoin Did program that if the net asset value multiple (mNAV) of the company fell below one and the financing options were exhausted, selling bitcoin would become “mathematically” justified to protect what he calls “bitcoin yield per share.”

However, he noted that the measure would be a last resort, not a policy change. “I wouldn’t want to be the company that sells bitcoin,” he said, adding that financial discipline must prevail over emotion when markets become hostile.

The company's model depends on raising funds when its shares are traded at a premium to its net asset value (NAV) and using that money to buy bitcoin, increasing the amount of bitcoin held per share. When that premium disappears, Le said, selling a portion of the holdings to meet obligations may be acceptable to shareholders, provided that the issuance of new shares is more dilutive.

Challenge of US$ 800 million

The alert comes at a time when investors are closely examining the company's rising fixed payments, linked to a set of preferred shares issued this year.

It estimated the annual obligations at around US$ 750 million to US$ 800 million, as recent issuances mature. Its plan is to finance these payments primarily through equity issuance at a premium to the net asset value (NAV).

“The more we pay dividends on all our instruments every quarter, the more the market will get used to the idea that, even in an unfavorable market, we will pay these dividends. When we do this, prices start to rise,” he said.

In addition to the financial aspects, Le defended the long-term thesis about bitcoin as a scarce and non-sovereign asset with global appeal. “It is not sovereign, it has a limited supply… people in Australia, the USA, Ukraine, Turkey, Argentina, Vietnam, and South Korea, everyone likes bitcoin,” he added.

New Bitcoin Credit Panel

Last week, the company launched a new “BTC Credit” dashboard to reassure investors following the recent drop in bitcoin and the massive sell-off of digital asset treasury shares. The company, the largest corporate holder of bitcoin, claims to have sufficient dividend coverage for decades, even if the price of bitcoin remains stable.

The company claims that its debt remains well covered if bitcoin falls to its average purchase price of around $74,000, and still manageable even at $25,000.