DATA & FIGURES
The sale of 3,588 bitcoin for $216 million is the largest bitcoin disposal in Strategy's history, with the company holding 843,775 bitcoin in its reserves and $2.55 billion in cash. The company's bitcoin sits at a cost basis near $63.9 billion, or roughly $75,700 a coin. The annual dividend load is estimated at $1.5 billion.
THE SCENARIO
The sale of bitcoin by Strategy reflects the company's growing cash bill due to its preferred securities, which pay dividends in cash, not bitcoin. As the company's software business does not generate enough to cover these dividends, it must raise more capital or sell coins to meet its obligations.
DIRECT QUOTE
"“Our goal is to make STRC the best credit instrument in the world”" — Michael Saylor, Chairman of Strategy
BBN INSIGHT
The Positive Side: The sale of bitcoin by Strategy demonstrates the company's commitment to its investors and its ability to manage its treasury effectively. The Negative Side: The sale of 3,588 bitcoin for $216 million may lead to a decrease in investor confidence and a potential decline in the value of Strategy's shares. Furthermore, the company's reliance on selling bitcoin to fund dividends may create uncertainty and volatility in the crypto market.
MARKET REACTION
At the time of writing, Strategy shares are down 2% in premarket, and bitcoin has dipped below $62,000.