Samson Mow supports Strategy's decision to potentially liquidate Bitcoin holdings
The prominent Bitcoin proponent voiced his support following Michael Saylor's indication that Strategy could divest some of its BTC reserves, marking a significant shift from the company founder's historical position.
When Michael Saylor revealed earlier this week that Strategy may liquidate parts of its Bitcoin reserves, BTC proponent Samson Mow characterized the move as one that provides the Bitcoin treasury firm with strategic flexibility and optionality.
"Committing to never sell restricts optionality. Public markets are warfare. In warfare, you require every possible tool available to you," Mow stated following co-founder Saylor's remarks during Tuesday's first-quarter earnings call for Strategy. Regarding the possibility that the firm could divest some BTC down the line, Mow further elaborated:
"The greater the number of tools Strategy possesses, the less vulnerable it becomes to its adversaries. A corporation with genuine optionality is difficult to predict: it could sell, hedge, issue securities, or acquire assets. A corporation that has publicly committed to exclusively pursuing a single course of action has provided a roadmap to short sellers and arbitrageurs."
According to BitcoinTreasuries, Strategy represents the biggest publicly listed Bitcoin treasury corporation, and currently possesses 818,334 BTC as of this writing, and any prospective liquidations could potentially impact spot BTC market valuations, as suggested by certain cryptocurrency market experts.
While indicating possible BTC liquidations, Saylor claims the firm can sustain dividends "forever" using BTC exclusively
"We'll likely liquidate some Bitcoin to finance a dividend, simply to inoculate the market, simply to communicate the message that we executed it," Saylor stated throughout the earnings call.
He indicated that provided BTC's price increases by greater than 2.3% on an annual basis, the firm can sustain its dividends "forever" and would additionally enable Strategy to distribute dividends "without liquidating a single share of stock."
"We have the ability to cease selling MSTR common stock at this moment," Saylor stated, further noting, "We can finance the dividends through Bitcoin liquidations."
Should the company manage to issue additional STRC preferred stock and should BTC climb beyond the breakeven threshold, it would have the capacity to sustain dividends perpetually, while simultaneously continuing to expand the quantity of BTC it possesses, Saylor explained throughout the earnings call.
Strategy's BTC holdings carry an average acquisition cost of $75,537 per unit, based on data from the company's website. At the most recent observation on Thursday, Bitcoin was trading at approximately $79,976, as reported by CoinMarketCap.
Strategy finances its BTC acquisitions utilizing a combination of corporate debt instruments and equity offerings, an approach that has generated concerns among certain investors regarding shareholder dilution and leverage-driven purchasing strategies.