Strategy CEO Phong Le defended the company's decision to sell Bitcoin near $60,000 and later buy back above $80,000, saying the trades followed the firm's cost of capital rather than Bitcoin's price. Strategy bought 4,603 BTC for $369.7 million last week, lifting its holdings to 845,050 BTC and pushing reported net leverage to zero.
Strategy sold Bitcoin near $60,000 and bought it back near $80,000 for the same reason, according to CEO Phong Le: the company's cost of capital, not Bitcoin's price, drives its treasury decisions. Speaking on Bloomberg Crypto on Sept. 1, Le said the two transactions occurred under different balance sheet and financing conditions, so neither contradicted the other.
Strategy links Bitcoin trades to capital costs
Le said management does not decide whether to buy or sell Bitcoin solely by comparing its current price with past levels. Instead, it weighs the cost of raising capital against the expected return from deploying it.
According to crypto.news: Le said "We buy or sell based on our cost of capital."
Strategy purchased 4,603 BTC for $369.7 million between Aug. 24 and Aug. 30 at an average price of $80,318, according to an Aug. 31 regulatory filing. The purchase lifted its holdings to 845,050 BTC, acquired for approximately $63.73 billion at an average cost of $75,412 per coin. Le said MSTR shares had become attractive to issue again because the stock was trading at a premium, and Strategy sold approximately $602.8 million of common shares during the week that ended Aug. 30, using part of the proceeds for the Bitcoin purchase.
Bitcoin sales funded financial obligations
Le said Strategy sold roughly 7,000 BTC during its balance sheet restructuring, describing the amount as "minuscule" relative to its total holdings. Strategy's public Bitcoin ledger records sales of 2,225 BTC in early July, 1,638 BTC in early August and 1,690 BTC the following week, reductions that total 5,553 BTC. Strategy had already committed to regular payments on its preferred securities and needed dollar liquidity to meet those obligations, after its board formally authorized a Bitcoin monetization program in June permitting up to $1.25 billion in sales to build its designated USD Reserve.
Strategy says net leverage has fallen to zero
Over roughly two months, Strategy increased dollar assets while reducing its net exposure to convertible debt. The company reported $6.71 billion in USD assets as of Aug. 30, against convertible debt of approximately $6.75 billion, putting net leverage at 0.0%. That does not mean Strategy has eliminated its legal debt or preferred stock obligations, since the leverage calculation does not subtract all preferred stock claims.
Le described the balance sheet as a "fortress," arguing Strategy has no meaningful Bitcoin liquidation price under its current structure because its debt is not secured directly by Bitcoin in a way that would automatically force sales at a stated level. Yet a prolonged Bitcoin decline could still reduce Strategy's asset value and weaken its ability to issue shares at attractive prices.
Strategy adopts a two-way Bitcoin policy
Le said Strategy now operates a "two-way strategy," under which it may sell Bitcoin when doing so improves its capital structure even as it intends to remain a net accumulator over time. Le said Strategy could continue purchasing Bitcoin at $90,000, $100,000 or $130,000 if the cost of capital makes those purchases attractive, though he described those levels as examples rather than forecasts. The Aug. 31 purchase confirms Strategy has returned to accumulation after its restructuring period, and the company now controls slightly more than 4% of Bitcoin's maximum 21 million supply.
Source: crypto.news
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