Strategy (MSTR) Stock: CEO Defends Bitcoin Trades Based on Capital Costs, Not Price

Key Takeaways

• CEO Phong Le justified Strategy’s decision to sell Bitcoin between $60K-$65K and repurchase at $80K, emphasizing capital cost considerations over market pricing.
• Last week, Strategy acquired 4,603 BTC for approximately $369.7 million at an average entry point of $80,318, pushing total reserves to 845,050 BTC.
• The firm achieved 0% net leverage after accumulating $6.71 billion in dollar-denominated assets to offset $6.75 billion in convertible bonds.
• A formal “two-way strategy” was implemented, authorizing Bitcoin sales for dividend payments, debt servicing, and balance sheet optimization.
• Over the trailing 12-month period, MSTR stock has declined 64%, currently priced at $123.47, while Bitcoin trades around $76,900.

On September 1, Strategy’s CEO Phong Le addressed a question that has sparked considerable debate among investors: why would the company divest Bitcoin holdings near $60,000 only to reacquire the asset above $80,000?

Le’s response was direct and unambiguous. The company’s Bitcoin transactions aren’t dictated by cryptocurrency valuations. Instead, they’re determined by the economics of capital procurement.

As of the latest trading session, MSTR stock sits at $123.47, representing a 64% contraction from its position twelve months prior. Bitcoin was valued at $76,900 on September 2.

Strategy Inc, MSTR

During his appearance on Bloomberg Crypto, Le outlined the underlying rationale. When Strategy can distribute common shares at a premium above net asset value, deploying those funds into Bitcoin enhances per-share metrics. Conversely, when such conditions don’t exist, liquidating Bitcoin to satisfy financial commitments becomes the optimal choice.

“Our Bitcoin acquisition or disposition decisions aren’t tied to Bitcoin’s market value,” Le stated. “They’re based entirely on our capital costs.”

Throughout July and August, Strategy liquidated approximately 7,000 BTC through three separate disclosed transactions totaling 5,553 BTC. These dispositions generated cash to fulfill preferred dividend requirements and support comprehensive balance sheet restructuring.

Le characterized these sales as “negligible” compared to overall reserves and maintained that converting Bitcoin into cash for preferred dividend obligations represented “the optimal decision under those circumstances.”

Balance Sheet Fortification

Strategy leveraged the two-month hiatus from Bitcoin acquisitions to strengthen its financial position. The company expanded its cash and cash-equivalent holdings to $6.71 billion by August 30, effectively matching its $6.75 billion convertible debt portfolio.

This restructuring reduced the company’s internally calculated net leverage to 0.0%. Le described the revamped balance sheet as a “fortress,” emphasizing that no forced Bitcoin liquidation thresholds are embedded within the debt agreements.

Simultaneously, Strategy issued roughly $602.8 million in common equity and deployed a portion of those funds to buy back $152 million worth of STRC preferred shares at prices below the $100 par value.

Resuming Accumulation

In an August 31 regulatory filing, Strategy disclosed a fresh acquisition of 4,603 BTC for $369.7 million during the week spanning August 24 through August 30, representing an average purchase price of $80,318 per unit.

This transaction elevated total Bitcoin reserves to 845,050 BTC, accumulated through approximately $63.73 billion in aggregate investment at an average acquisition cost of $75,412 per coin. Strategy’s position now represents slightly over 4% of Bitcoin’s fixed 21 million token supply.

Le clarified that resuming purchases wasn’t predicated on Bitcoin price forecasts. Rather, it reflected a capital allocation choice executed once MSTR’s equity premium made common stock issuance economically advantageous.

He emphasized that Strategy would consider acquiring Bitcoin at $90,000, $100,000, or even $130,000 if financing terms warranted such action. Similarly, additional sales remain possible if balance sheet optimization demands it.

The company’s board granted formal authorization in June for a Bitcoin monetization program, permitting up to $1.25 billion in cryptocurrency sales to establish a dedicated dollar reserve and satisfy corporate obligations.

Bitcoin was trading at $76,900 as of September 2.