MicroStrategy’s Bitcoin Stance Evolves: CEO Details Conditions for Potential Sales
For years, under the visionary leadership of Chairman Michael Saylor, MicroStrategy (now officially known as Strategy) has been synonymous with an unwavering commitment to Bitcoin, famously adhering to a “never sell” philosophy. This extreme conviction, which saw the company accumulate vast amounts of BTC, now appears to be softening. In a significant disclosure, CEO Phong Le recently admitted for the first time that MicroStrategy “could potentially” sell its Bitcoin holdings under specific, crisis-level financial conditions.
During a recent interview on the “What Bitcoin Did” podcast, Phong Le meticulously outlined the critical triggers that would prompt the company to consider divesting its Bitcoin:
- Market Cap to Net Asset Value (mNAV) Ratio Falls Below 1x: This key metric indicates that the company’s overall market capitalization has dropped below the intrinsic value of its held Bitcoin assets.
- Liquidity Exhaustion: A scenario where MicroStrategy can no longer secure new capital through traditional means, such as issuing equity or debt.
Le underscored that while the board currently has no immediate plans to sell Bitcoin, this option “is indeed on the table” if the company’s financial health deteriorates significantly. Crucially, he emphasized that a Bitcoin sale would only be considered if both of these severe conditions were to materialize simultaneously.
The urgency of this revelation is heightened by MicroStrategy’s current financial position. Its mNAV has recently dipped to approximately 0.95x, dangerously close to the 0.9x “red zone.” Should the mNAV fall below this critical threshold, several industry analysts and observers suggest that MicroStrategy might be compelled to sell Bitcoin to cover its substantial preferred stock dividends.
At the heart of MicroStrategy’s financial obligations lies an annual payout of $750 million to $800 million in preferred stock dividends. These instruments were initially issued to finance the aggressive acquisition of more Bitcoin. Historically, MicroStrategy has managed these costs primarily by issuing new shares. However, with the company’s stock price having plummeted over 60% from its peak and growing market skepticism, this once-reliable funding avenue has considerably narrowed.
Warnings from the U.S. Securities and Exchange Commission (SEC) have long highlighted that MicroStrategy’s liquidity risk would sharply escalate during a significant Bitcoin market downturn. While the company’s convertible bond structure offers a safeguard against “forced liquidation” or involuntary asset sales, CEO Le’s latest remarks represent the first explicit acknowledgment of a mathematically defined, “voluntary” trigger mechanism for Bitcoin sales. This stands in stark contrast to Michael Saylor’s previous steadfast declarations, such as his commitment to “always buy at the peak” and MicroStrategy’s firm refusal to ever sell its Bitcoin for cash.
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