MicroStrategy, the world's largest corporate holder of Bitcoin, has broken its long-standing "buy-only" practice. The company has disclosed its first-ever sale of Bitcoin, with the proceeds designated to pay preferred stock dividends. The sale price, while above the company's average cost basis, was below the current market price, drawing significant market attention.
According to an 8-K filing submitted on Monday, MicroStrategy sold 32 bitcoins between May 26th and 31st at an average net price of $77,135 per bitcoin, raising approximately $2.5 million in total. A footnote in the filing specifies that the proceeds from this sale are intended specifically for the company's preferred stock dividend payments. This marks the first officially disclosed Bitcoin disposal by the company.
Following the news, MSTR shares fell over 5% in pre-market trading, while Bitcoin itself dropped below the $72,000 level.
As of May 31st, MicroStrategy still holds 843,706 bitcoins, with an average purchase cost of $75,699 per coin. The recent sale price was about 1.9% above this average cost. However, according to CoinDesk data, Bitcoin's trading price had fallen below $72,000 on Monday. This means the company's overall unrealized profit on its massive Bitcoin holdings has narrowed significantly.
A Small but Significant First Sale
The scale of this sale is minuscule relative to the company's total holdings—32 bitcoins represent only about 0.004% of its over 840,000-coin treasury. The significance lies not in size but in nature: this is the first time the company has used proceeds from a Bitcoin sale to fund dividend payments. It signals a new operational dimension in its Bitcoin treasury strategy regarding capital utilization.
The footnote in the 8-K filing clearly states the proceeds are earmarked for preferred stock dividends. This indicates the company opted to liquidate a small portion of its Bitcoin to meet its dividend obligations to preferred shareholders without needing to tap other cash resources.
The Divergence Between Sale Price and Market Value
The average sale price of $77,135 not only covered the average holding cost of $75,699 but also represented a profit at the time of the transaction.
However, as of Monday, Bitcoin's market price had fallen below $72,000, which is lower than MicroStrategy's overall average cost. This implies that, measured at the current market price, the company's entire holding of 843,706 bitcoins is now in an unrealized loss position.
This price movement provides investors with a new reference point for evaluating MicroStrategy's Bitcoin strategy. It also raises market questions about whether the company can continue to meet its preferred dividend obligations through future Bitcoin sales.
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