Strategy CEO: Bitcoin sales only to fund STRC dividends or taxes

Phong Le, chief executive of Strategy, said in a Friday interview the company will sell Bitcoin only to pay dividends on its Series A Perpetual Stretch Preferred Stock (STRC) or to defer or offset taxes, and only when those sales are accretive to shareholders.

The STRC carries an 11.5% annual dividend. Le defined “accretive” as any action that increases the company’s Bitcoin-per-share metric and benefits common stockholders.

Le said Strategy will compare selling Bitcoin with issuing or selling equity and will pursue the option that preserves or raises Bitcoin per share for common holders.

The comments followed remarks from co-founder Michael Saylor during the company’s earnings call earlier in the week, when he said Strategy might sell some Bitcoin to fund a dividend and that Bitcoin appreciation above about 2.3% annually could allow the company to pay dividends without issuing more stock.

Strategy currently holds 818,334 BTC, valued at more than $66 billion at the time of reporting, making it the largest publicly traded Bitcoin treasury by that measure.

Investors have raised concerns that large sales by treasury companies could put downward pressure on Bitcoin’s price. Le pointed to Bitcoin’s roughly $60 billion in daily trading volume and said the market could absorb the roughly $1 billion in annual dividends Strategy owes.

Le emphasized that any sales would be limited and executed only when they produce net benefits for shareholders. He also said converting Bitcoin into cash could be used to manage tax timing or liabilities in specific circumstances.

Le told the interviewer, “I believe in math over ideology, and at the point where selling Bitcoin versus selling equity to pay a dividend is better for our Bitcoin per share, and for our common shareholders, we will do it.”

Strategy has previously used both equity and Bitcoin sales to fund operations and shareholder returns. The company said it will continue to weigh funding options for recurring obligations such as the STRC dividend.