Michael Saylor, the self-proclaimed 'bitcoin king,' has long embraced the laser-eye meme symbolizing his unwavering faith in cryptocurrency. However, last week the laser light dimmed as the ongoing crypto collapse forced him into a stunning admission: he might have to sell bitcoin.
The Strategy Behind the Hype
Saylor runs Strategy, which he proudly calls 'the world's first bitcoin treasury company.' Investing in Strategy is essentially a massive bet that bitcoin will keep rising. The company issues shares and takes on debt to fund giant bitcoin purchases and pay substantial cash dividends to its creditors.
Maintaining this model requires significant luck, as the leverage depends on continuous crypto gains to fuel the dividends that keep the cycle going. Last week, Strategy reported a staggering net loss of $12 billion in the first quarter, and on the earnings call, Saylor told investors he might have to sell.
The Crypto Party Continues
Meanwhile, at an industry conference in Miami, crypto enthusiasts celebrated at an official afterparty in a strip club, seemingly unfazed by the market turbulence. The crypto community loves to share memes depicting Saylor as a demigod with lasers shooting from his eyes, but the reality of a crashing market is hitting hard.
Bitcoin peaked last fall around $126,000 but had lost about half its value by the time the Iran conflict escalated, wiping out billions and pummeling Strategy's shares. The original cryptocurrency has recovered somewhat from its worst levels, but the slide took a heavy toll. Strategy's share value plunged 75 percent over the prior year and a half.
Saylor's Changing Tune
Back in February, when bitcoin and Strategy's stock were at their lowest in over a year, Saylor confidently stated, 'We're not going to sell bitcoin,' and insisted the company would keep buying bitcoin every quarter 'forever.' This echoed his earlier promise in 2020 that his company would hold bitcoin 'for a hundred years.'
He has repeatedly said he would 'be buying the top forever,' showing indifference to price volatility, and called bitcoin better than cash or gold. But on the first-quarter earnings call, a different Saylor emerged, saying the company would 'probably sell some bitcoin to pay a dividend just to inoculate the market and send the message that we did it.'
Contradicting his public record, he explained that the model was to fund purchases with credit, let bitcoin appreciate, and then 'selectively sell' portions to pay dividends. Following these comments, Strategy's stock fell 4 percent and bitcoin declined below $81,000.
Back to Buying
After the quarterly report, Strategy resumed buying bitcoin, and Saylor was clear about who is paying for it: shareholders. The company purchased 535 bitcoin for $43 million during the week ending May 10, paying an average of $80,340 per coin.
Saylor posted a video on X in which he raps about using the 'equity ATM'—stock sales—to hurt those who bet against the company and bitcoin. The company funded its acquisitions by selling 231,324 common shares and preferred stock, raising $43 million.
'You buy bitcoin with credit, you let it appreciate, and then you sell bitcoin to pay the dividend,' Saylor reiterated on the earnings call. He claims his words were aimed at short sellers, showing how he can make them lose money. Shares of Strategy were only down 60 percent from their all-time high at the time of the call, recovering from a 72 percent drop just two weeks earlier.
