Strategy Overpays for Bitcoin, Citing Long-Term Horizon
Michael Saylor of Strategy likened investing in Bitcoin to playing golf's 'long game', where success depends on patience and discipline. He stated that 'rich people like to buy Bitcoin' and buying it makes them rich. This philosophy is supported by the company's September report, which ranked second among financial companies in the S&P 500 behind Berkshire Hathaway.
The report highlighted Strategy's Total Reserve Capital (TRC) of $66 billion, a record reserve coverage ratio of 10.75x, and its ability to overpay for Bitcoin without worrying about short-term price fluctuations. The company's CEO, Phong Le, emphasized that their decisions depend on the cost of capital rather than the Bitcoin rate.
A recent example of this strategy was Strategy's decision to sell 7,000 BTC in the summer at prices ranging from $60,000 to $65,000 and then buying back 4,603 BTC in late August at $80,318 per coin for a total of $370 million. Le stated that the sale covered obligations related to preferred shares, while the price surge allowed Strategy to raise $602.8 million in inexpensive funding from the stock market.