Strategy sinks after revealing it has sold bitcoin
The largest corporate bitcoin holder sold 32 bitcoin for $2.5 million, with an average sale price of $77,135.
After much speculation following last week’s transfer of 411 bitcoin to Coinbase Prime, Strategy disclosed it sold 32 bitcoin in May, for $2.5 million, and raised $128.3 million via share issuance, according to an 8K filing.
This is the first time the company’s balance sheet has ever dropped since it started accumulating in August 2020. It has once before sold bitcoin, in December of 2022, but it “also bought 2,395 BTC, making the transaction a net increase and the sale primarily a tax-loss harvesting exercise,” per Coindesk.
Sure, it’s small potatoes compared to the 843,706 bitcoin stash Strategy still has, but it’s a stunning reversal from founder Michael Saylor’s “never sell your bitcoin” ethos. And while the amount sold is tiny, it’s the move itself that could dampen sentiment.
The company’s perpetual preferred equity instrument, STRC, has enabled the largest bitcoin holder to maintain its acquisition pace despite bitcoin’s tumble. But STRC, which has an 11.5% dividend, has fallen below its $100 par value amid news that Strategy’s $1.5 billion repurchase of convertible debt means the company’s cash reserve may cover only six more months of dividend payments.
Nicolai Søndergaard, a research analyst at Nansen, told Sherwood News, “For now, it does not seem like the market is panicking. Strategy had already announced some time ago that they were changing and likely at some point would be selling BTC to finance debt and pay shareholders etc. BTC took a small hit thus far since the announcement, but it doesn’t seem to have a large effect on the broader market.”
Correction: Updated piece to note that Strategy did once before sell bitcoin in December of 2022, but did so alongside a more significant buy.
