“Strategy now has a completely different business model,” wrote Peter Schiff, a longtime no-coiner and critic of Michael Saylor and his company. “Instead of selling common and preferred stock and issuing debt to buy bitcoin, the new strategy is to sell bitcoin to pay interest and dividends, pay off debt, buy back shares it sold, and hope that bitcoin’s price goes way up.”
“You guys who believed selling 32 BTC caused sell-off three weeks ago have some reflecting to do,” said Grant Cardone.
“Everyone was worried about Saylor getting liquidated,” wrote Jeff Sekinger. “Well this is it. This is what it looks like. They will sell chunks of BTC at a loss to fund their credit products that aren’t backed by cash flow. So if BTC doesn’t appreciate, they will continue selling at a loss.”
“I’m on board with the firm moving in this direction, wrote Josh Mandell. “When the usual approach to funding dividends is just selling more shares of common stock, opting to sell a small amount of bitcoin instead essentially behaves like a buyback of the common.”
“Strategy just sold ~1.5 months of dividend obligations in one week,” said Joe Burnett, an executive with fellow bitcoin treasury company, Strive. “At this pace and with 0% BTC appreciation, today’s dividend obligation is funded until 2056 … At ~3.4% annual BTC appreciation, today’s dividend obligation can be funded indefinitely.”
Finally, there’s Strategy CEO Phong Le: “Strategy is evolving from one-way capital issuance to active capital management.”