In a pattern that has generated significant interest in the cryptocurrency community, Michael Saylor, the Executive Chairman of Strategy (MSTR), has been sharing a playful X post nearly every Sunday for the past year. These posts typically feature a chart marked with orange dots that hint at potential Monday announcements regarding additional bitcoin purchases. However, this Sunday marked a subtle shift in Saylor’s messaging. Instead of merely sticking to his usual format, he introduced the prospect of “green dots,” prompting various interpretations among bitcoin enthusiasts.
The use of green dots has sparked speculation about possible stock buybacks or adjustments to the company’s balance sheet. There are also concerns that this could suggest an intention to sell bitcoin, a surprising move considering Saylor’s longstanding belief that “you do not sell your Bitcoin.”
Adding complexity to the situation, Strategy’s CEO Phong Le addressed the company’s financial position during a recent podcast. He underscored that Strategy currently faces no short-term refinancing risks. However, Le cautioned that if the company’s multiple to net asset value (mNAV) drops below 1, they may be compelled to sell some of their bitcoin reserves to uphold dividends on their perpetual preferred equity. Importantly, he mentioned that the company could strategically sell bitcoin acquired at a higher cost basis to offset capital gains, thereby bolstering bitcoin per share.
It’s worth noting that Strategy is the largest publicly traded corporate holder of bitcoin, boasting approximately 650,000 BTC. However, the company has seen its stock price decline significantly, falling 41% year-to-date and around 70% from its all-time high over a year ago. This downturn has restricted the company’s ability to issue common stock for raising funds to purchase additional bitcoin. Instead, Strategy has turned to issuing preferred shares for this purpose, although critics have raised concerns about the sustainability of paying preferred dividends without further diluting common stockholders or selling off parts of their bitcoin holdings.
