Phong Le, President and CEO of Strategy, the largest institutional investor in the cryptocurrency world, put an end to speculation that the company might be forced to sell Bitcoin.
Le stated that the company holds 845,000 Bitcoins, representing approximately 4% of the total supply, and argued that claims of “forced sales” in the market do not reflect the truth.
In an interview with Scott Melker, MicroStrategy CEO Phong Le made important statements regarding the company’s financial structure, its recent small-scale Bitcoin sale, and its future strategies.
Le stated that MicroStrategy was once neck and neck with BlackRock’s spot Bitcoin ETF (IBIT), but after the outflows in the last 30 days, it has become by far the world’s largest institutional Bitcoin holder, and that they are determined to maintain this position.
Le, who defended the company’s strategy of raising capital using “preferred capital” instruments, likened this method to tech giant Google’s issuance of convertible bonds and preferred stock for its AI investments. He stated that such flexible financial instruments are the most appropriate option for long-term assets like Bitcoin, whose return profiles will become clearer over time.
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Responding to critics who described the company’s symbolic sale of 32 Bitcoin (approximately $2.5 million) in recent weeks as a “forced sale,” Phong Le clarified the matter with the following statement:
“We have $52 billion worth of Bitcoin on our balance sheet. We planned this sale to familiarize ourselves with the market, test our processes, and assess future tax loss harvesting opportunities. We did not sell Bitcoin to meet our $12.5 million dividend obligation. If that were the case, we would have sold much more than $2.5 million.”
Le added that the company’s annual $1.7 billion cash dividend payment could easily be financed through MicroStrategy shares (equity), which have an average daily trading volume of $2.7 billion, and that this did not pose a risk for him.
Responding to critics’ claims about a decline in the company’s cash reserves, the CEO stated that the reason for reducing the reserves from $2.25 billion to $700 million was to repurchase $1.5 billion worth of convertible bonds.
The company added that, in order to reassure its debtors and shareholders, they have begun gradually increasing this reserve again, and that just last week they both strengthened their cash reserves and purchased $100 million worth of new Bitcoin.
Le stated that they regularly increase the amount of Bitcoin per share every year, noting a 77% increase in 2024, 23% last year, and 12% since the beginning of this year, emphasizing that investors should focus on a long-term (4-5 year) strategy rather than weekly fluctuations.
When host Scott Melker asked, “What is the most realistic scenario in which the company would have to sell Bitcoin?”, Le responded:
“The most realistic, though perhaps extreme, scenario involves our $3.5 billion convertible bonds maturing in 2028 with a high strike price of over $400. If Bitcoin has significantly depreciated by then and our share price is under pressure, we might consider selling Bitcoin to meet this obligation. However, we still have two years; we can refinance or convert these bonds into shares. As someone who believes Bitcoin is about to enter a new bull run, I don’t see any scenario where we’ll be forced to sell by 2028.”
*This is not investment advice.
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