MicroStrategy CEO Phong Le Responds to Reasons for Halting Bitcoin Purchases: Company Will Not Make Decisions Based on Bitcoin's Specific Price

In an interview with Bloomberg on September 1, Phong Le, President and CEO of MicroStrategy, addressed the company's two-month pause in increasing its Bitcoin holdings. He emphasized that the management's financial decisions are not influenced by short-term price fluctuations of the asset. During the pause in purchases, the company shifted its focus entirely to restructuring and optimizing its balance sheet.

Data shows that MicroStrategy's total assets have reached $72 billion, which includes $65 billion in Bitcoin reserves and $7 billion in USD positions. During this period, its USD liquidity reserves saw a significant increase of 34%, and the company successfully eliminated approximately $7 billion in net liabilities. Phong Le stated that this series of actions has greatly strengthened the intrinsic value of the company's equity, creating an impenetrable financial moat.

60% of Funds Flow Back to Bitcoin

After two months of silence, the firm has now resumed its purchasing activities. According to an 8-K filing submitted to the U.S. Securities and Exchange Commission (SEC) on August 31, the company spent over $369 million to acquire 4,603 Bitcoins between August 24 and 30, with an average purchase price of $80,318. As a result, its total treasury holdings have climbed to 845,000 Bitcoins, with a cumulative investment cost of approximately $63.73 billion, equating to an average holding price of $75,412 per Bitcoin.

Examining the source of funds, the filing clearly outlines the trajectory of liquidity transfers. Last week, the company sold over 4.53 million shares of MSTR common stock through an at-the-market (ATM) mechanism, raising approximately $602.8 million (equivalent to an average price of $133 per share). Of this substantial amount, only about 60% was actually converted into Bitcoin holdings; the remaining 40% was used to address internal special stock issuances, including $151.8 million for repurchasing STRC special shares, $50.7 million for dividend distributions, and $30 million allocated to the USD liquidity account.

Unveiling the Logic of Selling High and Buying Low

A review of the position changes over the past two months reveals that MicroStrategy effectively acted as a net seller during this period. After reaching a peak in holdings in mid-June, the company began to reduce its positions. By early August, its Bitcoin inventory had decreased by approximately 6,900 Bitcoins, with an average selling price around $64,000. The footnote in the 8-K filing clearly indicates that the approximately $108.6 million raised from this liquidation was entirely allocated to repurchasing STRC special shares.

This creates a seemingly contradictory investment logic of selling high and buying low: selling in the $64,000 range and then repurchasing above $80,000 two months later, incurring a price difference of about 25%. However, this is not a miscalculation of timing by the management but rather a consequence of the rigid scheduling of financial cycles. As a floating-rate perpetual special stock with a face value of $100, the dividend distributions and repurchases of STRC have a fixed timetable. When the priority of the balance sheet supersedes the price of the asset, the high-point repurchases and low-point sales become an inevitable outcome.

Recent data trends indicate that the average repurchase price of this special stock is steadily rising, from $94.27 in early August to $97.48 by the end of the month, just a step away from the $100 face value. However, the secondary market's response to this operation has been relatively muted. On Monday, MSTR's stock closed at $124.88, reflecting a discount of over 6% compared to last week's average selling price; on the same day, Bitcoin was priced at approximately $77,564, resulting in a paper loss of over $12.68 million on the 4,603 Bitcoins recently acquired by the company.

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