MicroStrategy may be preparing to sell BTC for dividends, says mining pool founder

Jiang Zhuoer, founder of the Chinese Bitcoin mining pool BTC.TOP, has interpreted MicroStrategy's (MSTR) recent statement—that it can cover 32 years of dividends with its Bitcoin holdings—as a message to the market not to be surprised if the company sells BTC to fund those payments in the future. He explained that with its perpetual preferred stock (STRC) depegging and trading below $100, it has become difficult for MicroStrategy to raise funds through preferred stock sales. As a result, the company has been buying Bitcoin over the past two weeks by issuing additional common stock, a dilutive and unsustainable fundraising method. Jiang suggested that the possibility of MicroStrategy selling Bitcoin to cover dividends could weigh on market sentiment. However, he also noted that MicroStrategy holds $55 billion in Bitcoin against annual STRC dividend obligations of $1.7 billion. Because STRC is preferred stock and not debt, MicroStrategy does not guarantee the principal. Jiang concluded that the company is therefore not exposed to leverage liquidation risk and is unlikely to fail to make its dividend payments.