Strategy Authorizes $1.25B Bitcoin Sale to Bolster Capital Reserves

The company’s decision, disclosed in a Monday filing with the U.S. Securities and Exchange Commission, grants the flexibility to monetize Bitcoin holdings to cover preferred stock dividends, debt obligations, and buybacks of both preferred and Class A MSTR shares. Executive chairman Michael Saylor stated that this new capacity, paired with an increased cash reserve of $2.55 billion, provides approximately 26 months of dividend coverage.

Strategy also raised the annual dividend rate on its STRC perpetual preferred stock to 12%, up from 11.5%. This adjustment arrives as the firm faces scrutiny from critics, including Peter Schiff and Ripple CEO Brad Garlinghouse, who have questioned the sustainability of issuing securities to fund ongoing Bitcoin acquisitions. Despite these concerns, investor sentiment remained resilient, with MSTR shares climbing over 3% following the announcement.

While Saylor previously hinted at further acquisitions, the company reported no new Bitcoin purchases for the week ending Sunday. Its holdings remain steady at 847,363 BTC, acquired at an average price of $75,651. The updated policy mandates that the cash reserve must cover at least 12 months of interest and dividend payments, a move designed to address liquidity worries that surfaced after the company's modified net asset value fell below critical thresholds earlier this month.