Why Strategy Dumped Its Biggest Bitcoin Tranche Yet

**Austin Campbell** (0:00)
Let's start with the real first story, which is Strategy sells Bitcoin again. This time in size. So Strategy sold 3,588 Bitcoin, as disclosed, for $216 million in cash, roughly. That's its biggest tranche yet, capping some previous selling to fund the preferred dividends. So one of the things that we're looking at is with the MNav premium gone, the question becomes, is selling Bitcoin to cover the dividends, the routine? Is it still an accumulator, or is this now a recurring seller in the current Bitcoin environment? So the facts, as we've said, were they broke their multi-year no-sell streak with the 32 Bitcoin sale, and now have followed on a month later with a much larger sale. The holdings as of July 5th are $843,775 Bitcoin in reserves, $2.55 billion of US dollar reserves, and a cost basis of $75,700 a coin, significantly above the $60K range where coins are currently trading.
MNav fell below one for the first time on June 27th to 99 cents. It has since recovered some. That is per CoinDesk and mnav.com. Those numbers vary a little depending on how you compute them, directionally correct.
STRC had traded as low as $74.57. I saw it back up around the 90s today before the show started. The dividend was raised 50 basis points to 12%.
Certainly, it has improved. It is not fully back to the $100 of par. The new framework is authorizing selling of up to $1.25 billion of Bitcoin, the monetization program plus a repurchase program, STRC first. I want to start here before we get into deeper bull and bear cases. Chris, I know you're like an investment banking guy, Ram, you've done a lot of investing. What do you think of the structural mechanics here? Like Saylor clearly is now pivoted to selling Bitcoin off the balance sheet versus issuing even more MSTR. What is that telling you as a starting point?

**Chris Perkins** (2:31)
Go for it, man.

**Chris Perkins** (2:33)
Well, look, two ways to fund the debt obligations. They can either issue common stock, which is dilutive and would hurt MSTR. That would send MSTR going down or they can sell Bitcoin. If they do sell Bitcoin, then they get this narrative violation.
We mentioned last week that MSTR could be prone to a short covering rally. You're seeing that on the news. What's more constructive is you're seeing STRC and STRF start to close the gap versus PAR in the last few days. That's notable. They need to get that to PAR value. That's critical. If they can do that, then they can take a deep breath. They still have challenges ahead. But if they can't close that gap, that's going to be an issue. I still view this as a trading asset prone to these violent short covering rallies. I think it's in the midst of one right now. I'd also want to look at the dates of their sales of Bitcoin versus the announcement of the date.
Because if they were able to sell Bitcoin and Bitcoin supported the sale and digested it and also rallied the last two days, that's pretty encouraging. I don't know if anyone's looked at that data.

**Austin Campbell** (3:50)
I mean, you're sort of piling into what the bull case is, right? Which is to say, so Dan Crypto micro strategy with NAV at 1.09 and STRC on its way back, people will see everything around 1M NAV as a good value buy. BTC actually went up during selling this week. A couple of others have noted the same thing, right? Like Josh Mandel, Pete Rizzo, that they have sold and it behaves like, you know, essentially a buyback of these things. The bare read on the converse part though, Ram, is that the premium is dead and Bitcoin is still not going up. It is now a Bitcoin seller.
Rollin and Peter Schiff both said that. So like this kind of cuts both ways without Bitcoin going significantly up, right? Like, I mean, my understanding and correct me if I'm wrong, they have significant dividend coverage right now.
Saylor can sit on his hands for a decent amount of time and do nothing. But the problem is when you get to the point where that cash runs out, paying the preferreds, even if the preferreds have recovered a decent amount, if Bitcoin is not moving, aren't we right back where we started just a year later?

**Chris Perkins** (5:05)
Yeah, my guess is that you had fast moving traders step in to buy the dip when you saw that volume capitulation and a lot of puking last week.
That's fast money. I don't think that's enduring long-term buying. They probably will sell that and get a quick flip.