Strategy CEO on selling bitcoin: When it's better than issuing equity to pay dividends, we'll do it
Speakers
Phong Le — CEO
— MicroStrategy CEO
Summary
Strategy CEO Phong Le discusses the company's shift from never selling bitcoin to selling it when accretive for shareholders, using the new STRK perpetual preferred stock. He defends the company's leverage and dividend coverage, comparing it to investment grade, and dismisses liquidity concerns. The interview focuses on the financial management of Strategy's large bitcoin holdings.
- CEO Phong Le explains the strategic shift to selling bitcoin conditionally when accretive to bitcoin per share.
- The new STRK perpetual preferred stock has raised $8.5 billion in ten months.
- Strategy's leverage is 10-15% and amplification is 35%, comparable to investment grade.
- The company has $60 billion in bitcoin and a $1.5 billion annual dividend obligation.
- CEO says bitcoin's daily liquidity of $60 billion makes their selling impact negligible.
- The company does not plan to hive off its software business, which is small and non-material.
- Management focuses on math over ideology when deciding to sell bitcoin.
- The interview reinforces confidence in Strategy's financial stability and bitcoin strategy.
Trade Ideas
Strategy is financially sound and manageable.
Strategy's leverage is around 10-15% and amplification is about 35%, which the CEO says would be rated investment grade based on those KPIs. The company has $60 billion in bitcoin to cover its dividend obligations, and they manage leverage and amplification thoughtfully. Therefore, the company is financially sound and not at risk of dividend coverage issues.
