Michael J. Saylor: MicroStrategy Implies It Will Continue to Sell Bitcoin to Pay Dividends, but the Company Is Not at Risk of a Margin Call

BlockBeats News, June 18th, Jiang Zhuo'er, founder of B.TOP mining pool, commented on MicroStrategy's post about "its BTC reserve being able to pay dividends for 32 years," stating that MicroStrategy (MSTR) holds $55 billion in BTC, only needs to pay $1.7 billion in STRC dividends per year, and can pay dividends for 32 years by selling BTC.

It is important to note that STRC is preferred stock, not bonds, so MSTR does not have the risk of being liquidated due to leverage and will not default on dividends. However, STRC has already deviated significantly and cannot be refinanced. Although MSTR has been buying BTC in the past two weeks, it has been done through issuing more common stock, which cannot be sustainable every time.

This is to inform the market that in the future, when the company sells BTC to pay dividends, do not be surprised. Although the amount sold is relatively small compared to the entire BTC market, the blow to market confidence will be significant because MicroStrategy has started substantial selling of coins. Not everyone knows that STRC is stock, not bonds, and that MSTR does not have the risk of leverage liquidation. Many will fear that "this MicroStrategy bomb will explode at the bottom of the bear market."