Strategy CEO Phong Le said the company will sell bitcoin to fund dividend payments when it is a better option than issuing equity [1].
This approach marks a potential shift in how the company manages its digital treasury to reward shareholders. By weighing the cost of equity dilution against the liquidation of bitcoin, the firm aims to optimize its capital-raising outcomes [1, 3].
Le discussed the strategy during an interview on CNBC’s "Power Lunch" [1, 2]. He said that the decision to sell depends on which method provides the most financial advantage at the time of the payment [1].
"When it's better than issuing equity to pay dividends, we'll do it," Le said [1].
Despite the possibility of selling portions of its holdings, Le said that the company maintains a strong position for growth. He said the firm now has more flexibility than ever to continue accumulating bitcoin [3].
According to reports, Strategy has realized $4.6 billion [4] in bitcoin gains. This substantial reserve provides the company with a buffer that allows for these flexible funding strategies without compromising its core operations [4].
External analysts have viewed such moves as prudent. Samson Mow said that selling a portion of the treasury is a responsible move [5].
“"When it's better than issuing equity to pay dividends, we'll do it."”
This strategy suggests that Strategy is treating its bitcoin holdings as a liquid capital tool rather than just a long-term store of value. By comparing the cost of selling bitcoin to the cost of equity issuance, the company is attempting to minimize shareholder dilution while maintaining dividend payouts, effectively using the volatility and growth of the crypto market to subsidize corporate distributions.
