By now, we have seen the historic news of Saylor’s Strategy selling $216M in Bitcoin. Some of you may be shocked, or confused as this contradicts his promise to “never sell your Bitcoin”.
I broke down the mechanics in a full analysis, figuring out why Strategy unfortunately has to do so, here's the short version.
STRC (Stretch) is Strategy’s preferred stock, designed to provide investors with a steady cash dividend while giving Strategy additional capital to purchase more Bitcoin.
Strategy's STRC preferred stock is supposed to trade near $100 (its "par" value), defended by Strategy raising or lowering its dividend rate. In April, STRC broke that parity and kept falling, hitting an all-time low of $71.25 in June. Strategy hiked the rate to fix it (11.50% to 12.00%), and price partially recovered to the high $80s, but still below par.
**The problem: Without STRC being at par, Strategy cannot effectively raise further funds to buy BTC**
Since STRC is still below par, Strategy is going to have to raise rates further and this would put further strain on Strategy’s cash reserve. A reserve which back in May, for unrelated reasons actually dropped below its own 12-month safety minimum. To rebuild their cash reserve, they had to raise capital and part of that rebuild unfortunately meant selling $216M in Bitcoin.
The real insight is what’s next, Strategy is currently authorized to sell up to $1.25B for this purpose of funding dividend payments. They have used $216M of that (17%) but STRC is still trading below par (\~$88 as of writing), so this pressure hasn’t gone away. Nothing's confirmed, but I wouldn't be surprised if we see more sales.
Full breakdown with charts and sourcing: [https://www.coingecko.com/learn/why-strategy-sold-216m-bitcoin](https://www.coingecko.com/learn/why-strategy-sold-216m-bitcoin)
