Overview
- On Monday the company unveiled a “Digital Credit Capital Framework” that formally allows the board to sell up to $1.25 billion of bitcoin for three narrow purposes: rebuilding a USD reserve, funding preferred dividends and interest, and supporting share repurchases.
- The firm said it has rebuilt its USD Reserve to about $2.55 billion and set a board floor requiring the reserve cover at least 12 months of preferred dividend and interest obligations.
- Strategy raised the dividend on its Variable Rate Series A Perpetual Stretch Preferred (STRC) to 12% and authorized up to $1 billion in buybacks for preferred securities plus $1 billion for common stock, with bitcoin sales permitted to fund repurchases.
- Markets reacted with mixed signals because the company’s mNAV has fallen below 1, STRC trades well under its $100 par, and the bitcoin treasury sits roughly $13–$14 billion underwater, leaving significant structural and refinancing risks unresolved.
- The change breaks the firm’s previous ‘never sell’ posture and could shrink the stock’s premium as a leveraged bitcoin proxy while critics including Grayscale research and industry figures continue to press for larger controlled sales or deeper cash rebuilding.