Company's Stance on Bitcoin Holdings and Dividend Payments
Strategy (formerly MicroStrategy) CEO Phong Le provided insights into the company's Bitcoin strategy, dividend policy, and potential future business models during an interview with Bloomberg Crypto. Le affirmed that the company has no intention of selling its Bitcoin holdings, even amidst significant price volatility. He emphasized their aim to continue dividend payments "indefinitely, as much as possible." Furthermore, the company may explore Bitcoin lending opportunities when market conditions are favorable, according to Bloomberg.
Reflecting on the Bitcoin purchases initiated by Michael Saylor in 2020, Le reiterated that the company's long-term vision remains consistent, with Bitcoin serving as its primary treasury reserve. While a dollar reserve has been established for short-term liabilities, this reserve is intended to act as a buffer for dividend and interest payments rather than necessitating the sale of Bitcoin. "We won't sell Bitcoin unless absolutely necessary," Le stated. "We currently have enough dollar reserves to cover two to three years of dividends, and we've strengthened that even further."
Addressing Dividend Policy and Market Misconceptions
The CEO addressed concerns surrounding the company's dividend policy, explaining that suspending payments would significantly erode investor trust. He asserted, "I would never say never, but our goal is to pay dividends indefinitely. This is important for the company, our investors, and the Bitcoin ecosystem."
Le also refuted claims circulating in the market regarding an "overly leveraged structure." He pointed out that Strategy's leverage ratio, currently at 12% and including preferred stock, rises to 27%, which he considers well below the average for publicly traded companies in the US. "There was a huge misconception in the market that our company wouldn't be able to pay dividends or would be forced to sell Bitcoin," he remarked. "We've cleared that up."
Exploring Bitcoin Lending and Partnerships
The interview also touched upon Bitcoin lending. In response to a question from a Bloomberg reporter, Le acknowledged the current historic levels of the Bitcoin lending market. He explained that the company's prior hesitation to enter this area was due to maintaining a "simple" business model. However, he indicated that Strategy might consider this sector as major US banks increasingly engage in Bitcoin custody, lending, and staking services.
"Traditional financial institutions are entering this space strongly. If the opportunity arises to work with large, solid US banks, we are willing to consider services like Bitcoin lending."
Phong Le disclosed that initial discussions have occurred with several major banks regarding cryptocurrency services, though these have not yet progressed to partnership agreements.
Defending Operational Status Against Index Exclusion Proposals
Concluding the interview, the CEO emphasized that Strategy is an operational company, not an investment fund. He expressed opposition to MSCI's proposal to exclude companies holding digital assets in their treasuries from indexes. Le argued, "We are not an ETF, we are a business. We buy Bitcoin, develop products, generate revenue, and employ staff. Therefore, excluding us from the indexes would not be the right approach."