MSTR jumps after Strategy says it may sell more Bitcoin to fund dividends and buybacks

Here is the latest from the digital-asset markets: Strategy (formerly MicroStrategy) shares rose Monday after the Bitcoin holder moved to reassure investors that it can meet its preferred stock obligations, authorizing up to $2 billion in buybacks and opening the door to Bitcoin sales that could fund dividends, interest payments, and repurchases. The company, led by Executive Chairman Michael Saylor, announced a new Digital Credit Capital Framework that gives management more room to defend its capital structure, which has come under pressure as Bitcoin weakened and Strategy’s preferred securities traded below their stated values. Following the announcement, MSTR gained 3.

52 in early market trading, while the distressed STRC climbed to $81. These price actions followed a broader sell-off in these stocks last week, when investors questioned whether Strategy could continue to rely on equity and preferred stock issuance to fund its Bitcoin strategy without adding pressure on existing shareholders. The framework marks one of the clearest signs yet that Strategy is adjusting its playbook after years of raising capital to accumulate Bitcoin.

Market Dynamics

The company said it remains committed to Bitcoin as its primary treasury reserve asset, but it now has formal authority to use part of that reserve as a source of liquidity when management decides that selling Bitcoin is more attractive than issuing common stock or other securities. Strategy held 847,363 Bitcoin as of June 28, valued at about $50. The position remains the largest corporate Bitcoin holding in public markets, but it also carries an unrealized loss of more than $13 billion based on the company’s disclosed acquisition cost.

Strategy builds cash reserve Strategy said its US dollar reserve stood at about $2. 55 billion as of June 28, including expected proceeds from shares sold through its at-the-market offering program that had not yet settled. The company said the reserve may be used only to pay dividends on preferred stock and interest on outstanding debt unless the board approves another use.

Based on current annual preferred dividend payments and interest expense of about $1. 76 billion, the reserve provides coverage of about 17. Strategy Key Metrics (Source: Strategy) The board also adopted a policy requiring Strategy to maintain a minimum reserve equal to at least 12 months of expected preferred dividends and interest expense.

Market Impact

Any move below that threshold would require board approval. That reserve is intended to address one of the central concerns around Strategy’s funding model. Its Bitcoin holdings do not generate income, whereas the preferred securities issued to finance the company’s Bitcoin accumulation carry recurring dividend obligations.

The company also said it has $1. 25 billion of board-authorized Bitcoin monetization capacity that can be used to build or replenish the reserve. When combined with the current cash reserve, Strategy said it has about $3.

8 billion of current liquidity coverage for preferred dividends and interest expense, equal to 25. 9 months of coverage before repurchases, taxes, transaction costs, market conditions or changes in dividend rates. STRC dividend rises to 12% Strategy also raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, to 12% from 11.

This shift continues to shape the digital-asset landscape, with analysts examining its near-term effects.