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Strategy shares fell after Michael Saylor said the company could sell a small amount of Bitcoin to help fund preferred stock dividends.
The comment marked a shift from Saylor’s long-running public insistence that Strategy would not sell Bitcoin. MSTR rose 1.7% to $186.90 on Tuesday, then fell between about 1.4% and 3.5% after hours following financing discussions and a wider first-quarter loss tied to Bitcoin’s decline.
Saylor Says Small BTC Sale Could Fund Dividends
Saylor said Strategy may sell some Bitcoin to fund a dividend and reduce market anxiety around the possibility that the company could ever sell part of its holdings.
“We may sell some Bitcoin to fund a dividend, to signal to the market that we can do it,” Saylor said during the first-quarter earnings call.
Chief Executive Officer Phong Le also said Strategy would sell Bitcoin when it makes sense, while stressing that the company still plans to remain a net buyer of Bitcoin.
Strategy Reports $12.54B Loss From Bitcoin Exposure
The comments came after Strategy reported a first-quarter net loss of $12.54 billion, or $38.25 per diluted share. That compared with a $4.22 billion loss a year earlier. The company said the loss was driven mainly by a $14.46 billion unrealized loss on its digital assets.
Strategy held 818,334 BTC as of May 3. The holdings had a market value of $64.14 billion and an average purchase price of about $75,537 per Bitcoin. The results show how sharply Strategy’s earnings can move under fair-value accounting when Bitcoin falls during a reporting period.
$1.49B Annual Costs Raise Funding Questions
The possible Bitcoin sale is tied to Strategy’s preferred stock structure, which creates recurring dividend obligations. The company said it has paid more than $692 million in cumulative preferred dividends and had more than $13.5 billion of preferred equity outstanding.
Strategy’s annual interest and dividend costs rose to about $1.49 billion, up 68% from three months earlier. It also holds a $2.25 billion cash reserve, which covers a little more than 18 months of obligations.
Those obligations make dividend funding a central question for Strategy’s financing plan. The next issue for investors is whether the company relies on new issuance, cash reserves or a limited Bitcoin sale to meet those costs while continuing to grow its Bitcoin holdings.
