In his interview, Phong Le stated that they are not going anywhere and that his goal is to become the largest Bitcoin buyer in the foreseeable future. Strategy recently sold over $215 million in Bitcoin as part of its capital strategy and has not purchased any Bitcoin since the week ending June 22. The company raised about $467 million through the sale of common stock last week, increasing its cash reserves to $3 billion. This reserve will be sufficient to cover preferred share dividend payments for approximately two years and provides additional financial flexibility, Strategy said.
Le said that they increased the cash reserve after preferred shareholders conveyed that it was important to keep liquid cash on the balance sheet in the short term. The executive added that the latest Bitcoin sale was also intended to demonstrate liquidity in the company's Bitcoin holdings.
Asked what they would do if Bitcoin remained under pressure or dropped much more, Le said that they did not expect any concern about the balance sheet unless Bitcoin dropped to 8 thousand to 10 thousand dollars. Le stated that when Bitcoin approaches these levels, they will have to evaluate the risks regarding their debt, and until that point, they feel very safe about their balance sheets. Bitcoin is currently trading around 65 thousand dollars.
The manager said that Strategy designed its capital structure to withstand bear markets and benefit from future rises. Le stated that the company is going through a similar period in the decline in 2022 and expects to continue accumulating Bitcoin in the long term. Strategy has now evolved from a Bitcoin treasury company into a broader digital equity platform and will continue to raise capital over time to support future acquisitions, according to the executive.
A key part of this strategy is the company's perpetual preferred stock, STRC, known as Stretch. Le said that they plan to issue more when STRC returns to its nominal value of $ 100, and the proceeds will be used to buy more Bitcoin and expand the dollar reserve. Issuing more preferred shares over time is a big part of the capital plan, according to the executive, as it increases the amount of Bitcoin per share.
STRC has been trading below its $100 face value since May and was around $88 on Wednesday. Le said shareholders know their primary goal is to surpass Bitcoin's yield over time, and they can issue more shares as long as the company's Bitcoin is priced above its net asset value. The mNAV ratio, which compares the company's market cap to the value of its Bitcoin asset, fell below 1 last month before recovering to around 1.02.