Strategy raises $1.44 billion to dispel 'FUD' during Bitcoin's bear cycle: CEO Phong Le

Phong Lê, CEO of Strategy, stated that the establishment of a $1.44 billion reserve fund aims to reassure investors about the company’s financial situation amid the decline in Bitcoin prices.

“We are an inseparable part of the cryptocurrency ecosystem, especially Bitcoin. That’s why, a few weeks ago, we decided to raise funds and increase the cash on our balance sheet to eliminate concerns and doubts circulating in the market,” Phong Lê shared on CNBC’s Power Lunch program on Friday.

This past Monday, Strategy announced the establishment of a $1.44 billion reserve fund, with capital raised through a stock issuance. The fund is set up to ensure sufficient resources to pay dividends for at least 12 months and will be expanded in the future to meet dividend payments for 24 months, according to the company.

This move comes amid concerns about Strategy’s ability to maintain its debt and dividend obligations if its stock price drops sharply.

“In essence, the issue lies in FUD (Fear, Uncertainty, Doubt) mentality,” Phong Lê emphasized.

“We are fully capable of paying dividends and almost never need to sell Bitcoin. However, the spread of FUD has caused many to doubt the company’s ability to meet its dividend obligations, leading to a trend of betting on Bitcoin’s decline,” he added.

“In just eight and a half days, we successfully raised $1.44 billion — equivalent to 21 months of dividend payments. We did this not only to dispel doubts but also to affirm the company’s fundraising capability, even when the Bitcoin market is in a down cycle.”

Phong Lê also stated that Strategy would only consider selling Bitcoin if the stock price falls below net asset value and the company is no longer able to access new capital.

In addition, the company has launched the “BTC Credit” dashboard, confirming that Strategy currently holds enough assets to fulfill dividend obligations for more than 70 years to come.

Mr. Giáo