Strategy Raises Cash, Purchases $100M Bitcoin After 61% Cash Reserve Drop
STRC•Strategy's preferred shares, with a $10 billion market cap, saw cash reserves shrink 61% after selling 32 Bitcoin for $2.5 million, prompting the worst weekly drop since November 2022. The firm then bought $100 million of Bitcoin, raised cash for bimonthly 11.5% dividends and earmarked $1 billion for debt service.
1. Cash Reserve Decline and Bitcoin Sale
The company sold 32 Bitcoin for $2.5 million, reducing cash reserves by 61% from peak levels and sparking concern over its ability to fund preferred share dividends without liquidating Bitcoin holdings.
2. Share Performance Impact
Its preferred shares endured the worst weekly decline since November 2022, as investors questioned the sustainability of the 11.5% annualized dividend and the impact of diminished cash buffers on share stability.
3. Strategic Bitcoin Purchase and Cash Rebuild
In response, the company purchased $100 million of Bitcoin and bolstered dollar holdings to restore liquidity, aiming to reassure investors of its commitment to maintaining dividend distributions without forced asset sales.
4. Dividend Schedule Adjustments and Debt Allocation
The firm has earmarked $1 billion for debt service and preferred dividends and will shift to a bimonthly payout schedule starting in July to better align cash flows with distribution obligations.
