UPDATED: STRATEGY'S CEO SAYS SELLING 7,000 BITCOIN NEAR $60,000 TO BUY 4,603 BACK AT $80,318 WAS THE RIGHT TRADE — HE MAY BE RIGHT — THE DIVIDEND CAME DUE EITHER WAY
Phong Le, Strategy's chief executive, was asked about the round trip and did not dodge it. “It was the right trade at the time to sell bitcoin to fund some of our Stretch dividends.” Here is that sentence with the numbers attached. The company sold roughly 7,000 coins between $60,000 and $65,000. It later bought 4,603 back at an average of $80,318, for $369.7 million.
Sell low, buy high, in that order. On its face that is the worst sentence in finance. Read it as a filing instead of a slogan, though, because he is describing a cash problem, not a call on price. Preferred shares are shares that owe a dividend, and dividends get paid in dollars. Bitcoin pays none. When the bill arrived the company could sell coins, sell stock, or borrow, and at $60,000 with the share price where it was, selling coins was the door standing open.
Look at what that bought. Net debt is now about nothing: roughly $6.79 billion in cash against roughly $6.75 billion in debt, with 845,050 coins still on the books. Whether that was worth fifteen to twenty thousand dollars a coin is a real argument, and it is worth having honestly rather than settling with a screenshot.
Here is the part that does not move. The company owes money in a currency it cannot make. So do you. The difference is that nobody is asking you to fund somebody else's dividend at the bottom of the range, and nothing forces your hand at $60,000 except your own nerve. That is not a small advantage. It is most of the reason to hold the coin instead of the equity.
UPDATE, 11:40 AM ET. Phong Le went further on X this morning, and Michael Saylor reposted it. Bitcoin and dollar assets up 34 percent to $72 billion over two months. Back to buying coins. “$MSTR has outperformed BTC and our prefs are paying dividends and up 10%+.” And the line everyone will quote: “net leverage down to 0%.”
That line is true and it is not the whole sentence. Net leverage is a measure of debt, and the debt really is gone. What a leverage ratio does not carry is the preferred stock, and there is $14.79 billion of it standing in front of common shareholders. Run it through the CEBE Tracker, the tool built to strip exactly this out, and 22.44 percent of the bitcoin reserve is still spoken for by somebody other than the owners — off the same August 31 filing.
We wrote this argument on August 31, before he said it, in a piece about Strive: no debt is not no claims. A company can retire every dollar it borrowed and still owe the first cut of the pile. What changed here is not that the claim went away. It changed rank. From the common seat, something is still ahead of you; it is wearing a different name.
None of which makes him wrong about the turn. Zero debt is a real achievement and $72 billion is a real number. Both things hold at once: the leverage is gone, and 22 cents of every coin is promised to someone else. Read the whole balance sheet, including the parts a ratio leaves out. Capitalist.
Sell low, buy high, in that order. On its face that is the worst sentence in finance. Read it as a filing instead of a slogan, though, because he is describing a cash problem, not a call on price. Preferred shares are shares that owe a dividend, and dividends get paid in dollars. Bitcoin pays none. When the bill arrived the company could sell coins, sell stock, or borrow, and at $60,000 with the share price where it was, selling coins was the door standing open.
Look at what that bought. Net debt is now about nothing: roughly $6.79 billion in cash against roughly $6.75 billion in debt, with 845,050 coins still on the books. Whether that was worth fifteen to twenty thousand dollars a coin is a real argument, and it is worth having honestly rather than settling with a screenshot.
Here is the part that does not move. The company owes money in a currency it cannot make. So do you. The difference is that nobody is asking you to fund somebody else's dividend at the bottom of the range, and nothing forces your hand at $60,000 except your own nerve. That is not a small advantage. It is most of the reason to hold the coin instead of the equity.
UPDATE, 11:40 AM ET. Phong Le went further on X this morning, and Michael Saylor reposted it. Bitcoin and dollar assets up 34 percent to $72 billion over two months. Back to buying coins. “$MSTR has outperformed BTC and our prefs are paying dividends and up 10%+.” And the line everyone will quote: “net leverage down to 0%.”
That line is true and it is not the whole sentence. Net leverage is a measure of debt, and the debt really is gone. What a leverage ratio does not carry is the preferred stock, and there is $14.79 billion of it standing in front of common shareholders. Run it through the CEBE Tracker, the tool built to strip exactly this out, and 22.44 percent of the bitcoin reserve is still spoken for by somebody other than the owners — off the same August 31 filing.
We wrote this argument on August 31, before he said it, in a piece about Strive: no debt is not no claims. A company can retire every dollar it borrowed and still owe the first cut of the pile. What changed here is not that the claim went away. It changed rank. From the common seat, something is still ahead of you; it is wearing a different name.
None of which makes him wrong about the turn. Zero debt is a real achievement and $72 billion is a real number. Both things hold at once: the leverage is gone, and 22 cents of every coin is promised to someone else. Read the whole balance sheet, including the parts a ratio leaves out. Capitalist.
THE BLOCK · Wed Sep 2 · 6:26 AM ET · balance-sheet figures verified against the 8-K filed Aug 31, acc 0001193125-26-375463 · + PHONG LE on X, Wed Sep 2, reposted by Michael Saylor · + CEBE TRACKER (cebetracker.io) senior claims 22.44%