Strategy CEO Defends $1.44-B Reserve: “It’s About Protecting Investor Confidence”

According to remarks made on CNBC’s Power Lunch, Strategy’s CEO Phong Le said the company moved quickly to calm investor fears after Bitcoin fell sharply. The firm announced a $1.44 billion US dollar reserve on Monday, raised through a stock sale.

The reserve is meant to hold enough cash to cover at least 12 months of dividend payments right away, and the company says it will expand that buffer to cover 24 months over time.

Reserve Aimed At Dividend Concerns

Based on reports, Le said the drive was largely about stopping what he called “dividend FUD.” He added that the $1.44 billion was put together in eight and a half days and, by his count, represents about 21 months’ worth of dividend obligations.

“We’re very much are a part of the crypto and Bitcoin ecosystems. Which is why we decided a couple of weeks ago to start raising capital and putting US dollars on our balance sheet to get rid of this FUD,” Le said on Friday.

The move followed growing questions about whether Strategy could meet its payout and debt commitments if its share price plunged. Company materials also highlight a new “BTC Credit” dashboard that claims the firm now holds enough assets to service dividends for more than 70 years.

Bitcoin’s Drop Tests Crypto Firms

Bitcoin’s slide has been severe. Once trading above $126,000 earlier this year, BTC fell roughly 30% from that high and hit about $88,130 on Friday, after a one-day drop near 4%.

Reports tie the decline to a wave of forced liquidations and dwindling retail interest. At the same time, money has flowed into gold, silver and some large-cap stocks, leaving crypto out of the rally.

Analysts such as Stephane Ouellette of FRNT Financial say the pullback could be a normal reset after a big run, not a sign that crypto is finished.

Investors had been asking whether Strategy would sell Bitcoin if the stock tumbled. Le told CNBC the company would only consider selling its BTC holdings if the stock price fell below net asset value and fresh capital was unavailable.

That stance was meant to reassure holders that the firm was not planning to liquidate core assets on the first sign of trouble. Still, the recent volatility fed narratives that dividend payments and debt service might be at risk, which in turn encouraged some market participants to place bets against the company.

Strategy’s public messaging emphasized access to capital as proof of strength. Raising $1.44 billion in a down cycle, the CEO said, was also designed to show the market that the company could still attract funding.

Based on reports, that was part of an effort to stop short sellers from piling into positions that bet on further declines. The company’s dashboard and the stated runway targets are clear signals aimed at easing investor anxiety.

Featured image from Unsplash, chart from TradingView