- Phong Le told Bloomberg Television the US$3 billion reserve strengthens liquidity and reassures preferred shareholders after their feedback, with no change to the Bitcoin thesis.
- Strategy made no BTC purchases or sales between July 6 and 12; it holds 843,775 BTC acquired for US$63.69 billion, the largest identified corporate stash.
- Le said the company’s roughly US$6.7 billion in convertible debt becomes a balance-sheet risk only if Bitcoin falls to about US$8,000 to US$10,000.
Strategy CEO Phong Le said the company’s US$3 billion (AU$4.29 billion) cash reserve exists to strengthen liquidity and reassure preferred shareholders, telling Bloomberg Television this week that the firm’s Bitcoin strategy is unchanged after a week without purchases.
The reserve, built up after recent stock sales, followed feedback from preferred shareholders who wanted more liquidity on the balance sheet, Le said.
Company disclosures put the buffer at about 20 months of coverage for roughly US$1.76 billion (AU$2.52 billion) in annualised preferred dividends and debt interest, and the funds are restricted to those payments unless the board approves another use.
Moreover, Strategy neither bought nor sold Bitcoin between July 6 and 12. Its last purchase came on June 22, when it added 520 BTC for about US$35 million (AU$50.05 million), and on June 30 it sold 3,588 BTC for about US$216 million (AU$308.88 million) to fund preferred dividends, the largest sale in its history.
Days before the quiet week, executive chairman Michael Saylor’s social posts had fuelled speculation about fresh purchases.
Likewise, Saylor outlined the funding approach during the company’s first-quarter earnings cycle, describing a model in which the firm buys Bitcoin with credit, lets it appreciate, and sells portions to cover dividends on preferred securities.
Related: Bitcoin Tops $64K as Cooling U.S. Inflation Fuels Fed Pause Hopes
Debt Safe Down to $8,000, Le Says
Le stated the company’s roughly US$6.7 billion (AU$9.58 billion) in convertible debt poses a real balance-sheet risk only if Bitcoin falls to about US$8,000 (AU$11,440) to US$10,000 (AU$14,300), and said Strategy holds enough liquidity to cover its obligations for years.
He described the firm as having evolved from a Bitcoin treasury company into a “digital capital platform”.
Le confirmed Strategy plans to keep raising capital through its preferred share classes, including the Stretch (STRC) security, to buy more Bitcoin, expand the cash reserve and support the balance sheet.
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