Bitcoin treasury firm Strategy has paused cryptocurrency purchases since late June and will resume buying once its Stretch (STRC) preferred shares return to their $100 par value, CEO Phong Le said in a Bloomberg TV interview on Tuesday. The company raised $467 million through common stock sales to build a $3 billion cash reserve, enough to cover two years of dividend payments. Le described the move as part of Strategy's evolution from a Bitcoin treasury company to a full digital capital platform, adding that the firm would need to consider debt-related risks if Bitcoin were to fall to the $8,000 to $10,000 range.
Strategy Plans Bitcoin Purchase Resume When STRC Shares Reach Par Value
Le stated the company will issue more Stretch preferred shares once they return to their $100 par value, which would enable profitable capital raising to fund Bitcoin acquisitions. "When Stretch gets back to par, we'll issue more. We'll buy Bitcoin. We may continue to beef up our U.S. dollar reserve," Le said, while acknowledging uncertainty about the timeline for recovery. STRC shares traded around $89 on Wednesday, below the $100 par level since mid-May. Le identified building the U.S. dollar reserve as the primary method to restore share value, noting that shares had climbed from the $75 range to close to $90 as the reserve grew in recent weeks.
Company Builds $3 Billion Cash Reserve Through Common Stock Sale
Strategy raised $467 million through a common stock offering to increase its cash reserve to $3 billion. Le said the reserve provides enough capital to cover two years of dividend payments and represents a strategic shift in the company's financing approach. "We've learned over the course of the last couple months that having that liquid access to U.S. dollar capital, whether it be one, two, three years, is quite important," Le stated. The company has not purchased Bitcoin since late June, focusing instead on cash accumulation during this period.
CEO Identifies $8,000-$10,000 Bitcoin Price as Debt Risk Threshold
When asked about downside scenarios, Le specified that Bitcoin prices in the $8,000 to $10,000 range would trigger debt risk considerations. "When Bitcoin gets down closer to $8,000 to $10,000 is when we're going to have to consider some of the risk associated with our debt," Le said, adding that the company feels secure about its balance sheet until that point. Bitcoin traded at roughly $64,700 at the time of the interview. Le compared the current market conditions to 2022, stating the company had navigated similar downturns previously.
Strategy Holds Over 840,000 Bitcoin Amid Market Concerns
Le defended Strategy's position as Bitcoin's dominant institutional holder, stating the company holds more than 840,000 BTC—approximately 4% of the 21 million total supply. "We're not going anywhere. Anybody that's worried about Strategy shouldn't be," Le said. He noted that the firm's recent $216 million in Bitcoin sales, which began when co-founder Michael Saylor started trimming the $54 billion holdings last month, "did not move the market" given Bitcoin's $30 billion to $40 billion daily trading volume. Le also dismissed a Bloomberg report about distressed funds discussing STRC swaps, saying the company has not had "any material conversations" about such arrangements. Strategy's MSTR stock is down more than 77% over the past year, while Bitcoin has declined 45% in the same timeframe.
FAQ
Why did Strategy stop buying Bitcoin in late June?
Strategy paused Bitcoin purchases because its Stretch (STRC) preferred shares fell below their $100 par value, making it unprofitable to issue new shares for capital raising. CEO Phong Le stated the company will resume buying once STRC returns to par value.
What is Strategy's current cash reserve and how will it be used?
Strategy raised $467 million through common stock sales to build a $3 billion cash reserve. This amount covers two years of dividend payments and provides liquidity as the company shifts from a Bitcoin treasury firm to a digital capital platform.
At what Bitcoin price level would Strategy face debt concerns?
CEO Phong Le stated that Strategy would need to consider debt-related risks if Bitcoin falls to the $8,000 to $10,000 range. At the time of the interview, Bitcoin traded at approximately $64,700.
