Strategy CEO Phong Le said the company would only need to seriously evaluate balance-sheet risks if bitcoin drops toward the $8,000–$10,000 range, adding that the firm remains financially well-positioned under current market conditions.
Strategy (MSTR), the largest publicly listed corporate holder of bitcoin, does not expect major concerns unless BTC experiences an extreme downturn to those levels, Le said in a Bloomberg TV interview on Tuesday.
He described that price range as the point where the company would need to reassess potential risks tied to its debt obligations. A decline to $8,000–$10,000 would mark an approximately 85% drop from bitcoin’s current level near $64,500.
“Until then, we feel very secure about our balance sheet,” Le said, explaining that Strategy’s focus is on maintaining a capital structure strong enough to endure bearish market cycles while taking advantage of future bull markets.
Strategy’s preferred stock STRC, created to provide cash flow for bitcoin purchases while offering investors a regular dividend currently yielding about 13% annually, has struggled in recent months. The stock is intended to trade around a $100 par value but fell below that mark in April and dropped under $75 in late June.
A STRC price below $100 limits Strategy’s ability to issue additional shares and use the proceeds to acquire more bitcoin.
Le said expanding the company’s U.S. dollar reserves is a critical step toward supporting STRC’s recovery, which has since improved toward the $90 range.
He noted that recent market conditions highlighted the importance of maintaining strong access to liquid dollar funding and said Strategy plans to continue increasing its cash reserves.
MSTR shares closed nearly 6% higher at $97.58 on Tuesday, although the stock remains down about 36% since the start of the year and roughly 78% lower compared with 12 months ago.
A key metric investors are monitoring is Strategy’s market capitalization-to-net-asset-value (mNAV) ratio, which compares the company’s valuation with the value of its bitcoin holdings. The ratio slipped below 1 at the end of June and now stands near 1.02, meaning MSTR shares trade at only a modest premium to the underlying BTC assets.
Le said that as long as MSTR continues trading above the net asset value of its bitcoin holdings, shareholders are still assigning additional value to the company’s strategy beyond bitcoin’s own price performance.
