Disclosure: One of the authors of this story owns shares in Strategy (MSTR).
Strategy (MSTR), the largest publicly traded holder of bitcoin , sold some of its holding for the first time in four years to fund dividend payments on STRC, its perpetual preferred stock, known as Stretch.
The company sold 32 bitcoin between May 26 and May 31 at an average of $77,135, totaling $2.5 million, disclosed in an 8-K filing on Monday. Strategy still held more than 843,700 BTC at month-end, purchased at an average cost of $75,699. That means the sale accounted for just 0.0038% of the company’s holdings.
The sale was not unheralded. Executive Chairman Michael Saylor discussed several potential sources of capital that could be used to meet dividend obligations and support the balance sheet in a recent interview with CoinDesk. Selling bitcoin was one of the options mentioned.
Saylor emphasized that management evaluates these decisions through the lens of bitcoin per share, prioritizing actions that are accretive to shareholders.
The largest cryptocurrency dropped below $71,500 on Monday following the sale announcement and Iran’s decision to halt talks with the U.S. in protest over Israel’s incursions into Lebanon. More than $90 million in BTC-tracked futures positions liquidated shortly after.
Strategy shares slid more than 6% and were recently trading at $149.25.
The sale is Saylor’s first standalone divestment disclosed to date. In the December 2022 sale of 704 BTC, the company also bought 2,395 BTC, making the transaction a net increase and the sale primarily a tax-loss harvesting exercise.
The latest transaction stands out because it appears to be the first net bitcoin reduction recorded in a standalone 8-K filing. It is also the first time Strategy has publicly disclosed a bitcoin sale on its website.
In addition, for the week, Strategy raised $128.3 million through its at-the-market (ATM) common stock program and allocated a small portion of the proceeds to increase its U.S. dollar cash reserve from $871 million to $900 million. It recently spent $1.5 billion to repurchase its 2029 convertible notes.
Read more: Strategy holds STRC dividend at 11.5% for fourth straight month
UPDATE (June 1, 13:41 UTC): Adds previous sale starting in fifth paragraph.
UPDATE (June 1, 14:04 UTC): Rewrites first two paragraphs, adds third on sale being flagged in advance, share price reaction.
