Strategy Hints at Bitcoin Sales to Cover Dividends After Massive Q1 Loss

Strategy Inc. (NASDAQ: MSTR), the largest corporate holder of Bitcoin, revealed it may sell part of its Bitcoin reserves to support dividend payments after posting a sharply wider first-quarter loss. The announcement marks a notable shift from the company’s long-standing “never sell Bitcoin” approach championed by Executive Chairman Michael Saylor.

The company reported a Q1 loss of $38.25 per share, far exceeding Wall Street expectations of an $18.98 loss. The disappointing results were largely driven by a $14.46 billion unrealized loss tied to its Bitcoin holdings. Revenue reached $124.3 million, slightly below analyst forecasts of $125.07 million, but still up nearly 12% year-over-year.

During the earnings call, Saylor said Strategy may strategically sell some Bitcoin to fund preferred stock dividends and reassure investors about the company’s financial flexibility. He added that any future Bitcoin sales would depend on market conditions and Bitcoin prices. CEO Phong Le also noted that selling Bitcoin could provide tax advantages that may strengthen the company’s balance sheet.

Despite the accounting losses, Strategy continued expanding its Bitcoin portfolio. As of May 3, the company held 818,334 BTC, valued at roughly $64.14 billion, with an average purchase price of about $75,537 per Bitcoin. The firm’s Bitcoin holdings increased 22% year-to-date, while its BTC Yield reached 9.4%.

Strategy has financed much of its aggressive Bitcoin acquisition strategy through debt offerings and stock issuances, including preferred shares. The company raised $11.68 billion in capital this year and has already paid nearly $693 million in cumulative dividends across its preferred equity products.

MSTR stock fell more than 3% in after-hours trading following the earnings release, while Bitcoin prices remained largely stable above $81,000.