Samson Mow defends Strategy selling portions of its Bitcoin treasury

Bitcoin advocate Samson Mow defended Michael Saylor’s suggestion that Strategy could sell some of its Bitcoin (BTC), arguing that keeping the option open gives the company more flexibility in public markets.

“Never selling limits optionality. Public markets are war. In war, you need all available tools at your disposal,” Mow wrote after Saylor said during Strategy’s first-quarter earnings call that the company could sell some Bitcoin in the future.

Mow added:

“The more tools Strategy holds, the fewer angles its adversaries have. A company with real optionality is hard to game: it might sell, hedge, issue, or buy. A company that has publicly vowed to only ever do one thing has handed a map to short sellers and arbitrageurs.” 

Strategy is the largest publicly traded Bitcoin treasury company, with 818,334 BTC, according to BitcoinTreasuries. Some analysts have warned that any sales by the company could weigh on spot Bitcoin prices.

Strategy's total BTC holdings over time. Source: Strategy

Related: Strategy takes Bitcoin buying breather ahead of Q1 earnings report

As he signals potential BTC sales, Saylor says company can fund dividends “forever” on BTC alone

“We’ll probably sell some Bitcoin to fund a dividend, just to inoculate the market, just to send the message that we did it,” Saylor said during the earnings call.

He said that if the price of BTC appreciates by more than 2.3% annually, the company can fund its dividends “forever” and would also allow Strategy to pay dividends “without selling a single share of stock.”

“We could stop selling MSTR common stock right now,” Saylor said, adding, “We can fund the dividends with Bitcoin sales.”

Saylor discusses paying dividends using BTC appreciation. Source: Strategy

Saylor said Strategy could keep funding dividends if it continues issuing STRC preferred stock and Bitcoin rises above the breakeven level, while still increasing its total BTC holdings.

The average cost of Strategy's BTC holdings is $75,537 apiece, according to the company's website. At last look on Thursday, Bitcoin was changing hands at about $79,976, according to CoinMarketCap.

Strategy funds its BTC purchases through a mixture of corporate debt and equity instruments, a practice that has raised concerns with some investors over shareholder dilution and leverage-fueled buying.

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