Michael Saylor says Strategy isn't prioritizing share buybacks despite holding a $4.8 billion cash reserve, though he left the door open to repurchases if MSTR trades at a deep discount to net asset value. Executive Chairman Saylor and CEO Phong Le also defended the company's share issuance and outlined how bitcoin's price will guide future purchases.
Strategy's Executive Chairman Michael Saylor said Monday that buying back the company's own shares isn't a priority, though he left the door open to it if MSTR trades at a steep discount. The comments followed a rough stretch for shareholders, with MSTR down about 38% this year and 73% year-over-year, driven largely by bitcoin's decline. Still, the stock gained about 5% Monday as Saylor left open the possibility of future buybacks.
Cash reserve gives Strategy more flexibility
CEO Phong Le said the biggest lesson from the recent stretch was the need to hold enough cash to cover dividend payments on STRC, Strategy's preferred stock. The company now holds $4.8 billion in U.S. dollars, and Saylor said Strategy plans to keep large cash balances going forward, giving it room to buy bitcoin, repurchase MSTR or preferred shares, or pay down debt.
That flexibility extends to bitcoin holdings as well: according to Saylor, "We have to be able to sell bitcoin as well as buy bitcoin." He said bitcoin's price relative to its 200-week average will guide future purchases: when BTC trades far above that average, Strategy may hold onto more of the cash it raises, but when the price nears or falls below that average, it may signal a buying opportunity.
Dilution defended, buybacks tied to NAV
Le also defended Strategy's practice of issuing new MSTR shares. He argued that selling stock when MSTR trades above the value of its underlying assets lets the company buy more bitcoin, increasing the amount of bitcoin backing each share. Saylor separately ruled out buying profitable operating businesses, saying that would make Strategy more complicated and harder for investors to value.
On buybacks specifically, Saylor said the company would consider repurchasing shares only if MSTR trades at a very deep discount to its net asset value. He added that Strategy wants its STRC preferred shares to trade near the $100 level, selling more above that level or supporting the price through buybacks below it.
Saylor asks shareholders for patience
Saylor acknowledged the pain of the stock's decline but said MSTR investors should plan for at least a four-year time horizon, with seven to 10 years preferable. He added that Strategy has to be prepared for difficult years ahead.
Source: CoinDesk
Trading involves risk.
Risk Disclaimer
