Michael Saylor, the executive chairman of Strategy (NASDAQ: MSTR) and arguably the most prominent corporate Bitcoin advocate in the world, broke from one of his most closely held tenets on Monday when he acknowledged during the company’s Q1 2026 earnings call that the firm would likely sell some of its Bitcoin holdings to fund dividend obligations.
“We will probably sell some bitcoin to pay a dividend just to inoculate the market and send the message that we did it,” Saylor said during the call, a sentence that immediately reverberated across financial media and crypto markets.
The word “inoculate” was deliberate, framing the potential sale not as a forced liquidation but as a proactive signalling exercise designed to demonstrate to preferred stockholders and short sellers alike that Strategy can service its obligations from its Bitcoin stack without resorting to common equity issuance.
Strategy holds 818,334 Bitcoin at an average cost of $75,537 per coin. The company faces approximately $1.5 billion in annual dividend obligations across its two preferred stock instruments: STRK, which pays an 8% annual dividend, and STRC, which pays between 10% and 11.5% annually. STRC has grown to $8.5 billion in outstanding market value, making it the largest preferred stock instrument by market capitalisation in the world.
The Q1 2026 results that accompanied the dividend disclosure were unambiguously negative from a conventional financial perspective. Strategy reported a net loss of $12.54 billion for the quarter, driven almost entirely by a $14.46 billion unrealised fair-value loss on its Bitcoin position under GAAP accounting rules adopted in 2025. EPS of negative $38.25 per diluted share missed estimates for the third consecutive quarter.
MSTR shares fell more than 4% in after-hours trading following the announcement, and Bitcoin slipped from $81,500 to below $81,000 within an hour of Saylor’s remarks becoming public. Prediction market Polymarket quickly priced a 48% probability that Strategy would sell any Bitcoin at all during 2026.
Saylor pushed back sharply against the short-seller narrative during the call, arguing that the ability to use Bitcoin sales rather than equity issuance to service dividends was strategically superior. “If you’re a short seller and your thesis is the company’s got to sell equity in order to fund the dividends, I would like nothing better than to rip your wings off,” he said. CEO Phong Le supported the position, describing the balance sheet management as designed to maximise Bitcoin per share over time.
Strategy has declared and paid or committed to paying over $693 million in cumulative dividends across 23 consecutive distributions since launching its preferred equity products in early 2025. The company believes it requires Bitcoin to appreciate at only 2.3% annually for existing holdings to cover STRC dividend obligations indefinitely without selling common stock, a low bar given historical BTC performance.
