Saylor Signals End to Bitcoin Buying Freeze
MicroStrategy's CEO Michael Saylor has hinted that the company may resume buying Bitcoin. The two-word post 'We're Back' was a signal to traders, not a slogan. Three changes in MicroStrategy's finances have made it possible for them to buy more BTC.
The first change is that their debt no longer blocks bitcoin buys. They owe about $6.71 billion on convertible notes but hold around $6.69 billion in dollars. This means net leverage is at 0.1%.
Another factor is the build-up of cash reserves for dividend payments. In July, this reserve held $3.75 billion, and now it's at $5.10 billion. MicroStrategy has been using this money to buy back its preferred shares, STRC, which pays a 12% dividend.
The price of STRC is almost back at par with its objective of trading over time at $99 to $100. If it falls below $100, the company intends to repurchase shares in a disciplined manner. MicroStrategy has been selling coins in August to fund this defense.