Strategy's CEO sleeps fine — until $BTC dips below ten racks 🛏️

Strategy (MSTR), the largest publicly listed holder of bitcoin, has set $8,000 to $10,000 as the price zone where management would be forced to reassess its debt-related risks, according to CEO Phong Le. Bitcoin was trading around $64,500 as of writing, meaning a move into that range would represent a drop of roughly 85% from current levels. "Until that point in time, we feel very secure about the balance sheet," Le said in a Tuesday interview with Bloomberg TV. "What we need to do is build a capital structure that can withstand bear markets and of course benefit from bull cycles."

Le also pointed to expanding the company's U.S.-dollar reserves as a key lever in the recovery of preferred stock STRC, which had fallen below $75 in late June before climbing back to roughly $90. STRC is designed to maintain a $100 par value, carries a current 13% annual yield, and exists to fund bitcoin purchases through new share issuance. The instrument lost par in April, and when it trades below $100 Strategy's ability to issue additional shares for BTC accumulation is restricted. "We've learned over the last couple of months that having that liquid access to U.S.-dollar capital is quite important," Le said. "So we'll continue to build that."

Shares of MSTR closed Tuesday up nearly 6% at $97.58, though the stock remains roughly 36% lower year-to-date and 78% lower than 12 months earlier. The company's multiple to net asset value (mNAV), the ratio comparing market capitalization to the value of its bitcoin holdings, dipped below 1 at the end of June and now stands at 1.02, a slim premium over the underlying BTC. "As long as MSTR is priced at greater than the net-asset value of our bitcoin, it means that our shareholders are giving us credit for the performance above bitcoin," Le said. Bitcoin last traded at $64,902.11, up 0.32% on the session.