Saylor Defends Strategy as Bitcoin Slump Revives Market Concerns

Strategy, facing rising investor unease during Bitcoin’s recent downturn, is trying to calm the market.

Michael Saylor, the company’s executive chairman, wrote on X on June 20 that Bitcoin was trading around $20,000 in October 2022, when Strategy held 130,000 tokens. He said the company later went through a period when Bitcoin fell below $16,000 and its debt exceeded its assets by about $300 million.

Saylor said Strategy maintained its Bitcoin holding strategy through that stretch. “We remained steadfast, strengthened the company’s structure, and executed our treasury strategy,” he wrote. Since then, Strategy has raised more than $60 billion in capital and bought more than 716,000 additional Bitcoin, he added.

The company’s current Bitcoin and dollar holdings now exceed its debt by about $48 billion, according to Saylor. He also thanked those who “trusted the company, stayed patient, and maintained a long-term perspective.”

The post appeared as concerns around Strategy have intensified in recent days. Market attention has centered on STRC, the preferred stock that has served as a key vehicle for the company’s Bitcoin buying.

STRC fell to $88.59 on Nasdaq on June 19, well below its $100 par value.

Strategy has raised funds by offering dividends on STRC and using the proceeds to buy Bitcoin. But with the stock now trading sharply below par, worries are mounting over the company’s funding structure. STRC’s dividend yield stands at 12.98%.

At that rate, the company would have to pay nearly $1.2 billion in annual dividends.

Some investors are speculating that Strategy may sell part of its Bitcoin holdings to cover those payments. In May, the company sold 32 Bitcoin to secure funds for dividends, its first such sale in about four years and a break from the “never sell Bitcoin” principle it had long emphasized.