MicroStrategy CEO Pushes Back on "Forced Bitcoin Sale" Claims

Phong Le, President and CEO of Strategy (MicroStrategy), sought to quell market chatter that the firm could be compelled to sell its Bitcoin holdings. Le said the company holds 845,000 Bitcoin—about 4% of total supply—and argued that talk of imminent "forced sales" is misleading. Speaking in an interview with Scott Melker, Le addressed the company's capital structure, its recent small Bitcoin sale, and its longer-term plans. He said MicroStrategy had at one point been running close to BlackRock's spot Bitcoin ETF, iShares Bitcoin Trust (IBIT), but that recent outflows over the past 30 days have left MicroStrategy by far the largest institutional Bitcoin holder globally—a position he said the firm intends to defend. Le also defended the company's use of preferred capital instruments to raise funds, comparing the approach to how Google has used convertible bonds and preferred stock to finance AI-related investment. He said flexible financing tools are well suited to long-duration assets such as Bitcoin, where return characteristics become clearer over time. Le pushed back on criticism of the company's sale of 32 Bitcoin (about $2.5 million) in recent weeks, which some commentators labeled a "forced sale." "We have $52 billion worth of Bitcoin on our balance sheet," he said. "We planned this sale to familiarize ourselves with the market, test our processes, and assess future tax loss harvesting opportunities. We did not sell Bitcoin to meet our $12.5 million dividend obligation. If that were the case, we would have sold much more than $2.5 million." He added that the company's annual $1.7 billion cash dividend could readily be funded through equity, pointing to MicroStrategy shares' average daily trading volume of $2.7 billion. Addressing concerns over a drop in cash reserves, Le said the company reduced cash from $2.25 billion to $700 million primarily to repurchase $1.5 billion in convertible bonds. He said the firm has since begun rebuilding the cash buffer to reassure creditors and shareholders, noting that last week it both increased reserves and bought $100 million of additional Bitcoin. Le said the company aims to increase Bitcoin per share each year, citing a 77% increase in 2024, 23% last year, and 12% year-to-date. He urged investors to focus on a long-term horizon of four to five years rather than week-to-week price moves. Asked what scenario could realistically force a Bitcoin sale, Le pointed to the company's $3.5 billion in convertible bonds maturing in 2028, with a strike price above $400. He said a severe decline in Bitcoin combined with pressure on the company's share price could prompt consideration of selling Bitcoin to meet that obligation. Still, he emphasized the firm has time to refinance or convert the bonds into shares. "As someone who believes Bitcoin is about to enter a new bull run, I don't see any scenario where we'll be forced to sell by 2028," he said. This is not investment advice.