Strategy Unveils $1.25B Bitcoin Monetization, $2B Share Buyback Plan
STRC•Strategy unveiled a Digital Credit Capital Framework authorizing a $1.25 billion Bitcoin monetization program and $2 billion in share buybacks split evenly between common and preferred stock. It raised the preferred dividend to 12% effective July and set a $2.55 billion cash reserve covering at least 12 months of obligations.
1. Digital Credit Capital Framework Overview
Strategy formally ended its no-sell Bitcoin policy by adopting a Digital Credit Capital Framework. The change authorizes a $1.25 billion program to monetize BTC holdings, generate cash, fund dividends and cover interest obligations.
2. Share Buybacks and Equity Policy
The board approved $2 billion in share repurchases, split evenly between common and preferred stock, to deploy during market dislocations without tapping cash reserves. The company also instituted a policy to halt equity issuances when its share price approaches the value of its crypto holdings.
3. Dividend Increase and Cash Reserve
Effective July, Strategy raised its preferred stock dividend to 12% and established a $2.55 billion cash reserve, equal to at least 12 months of dividend and interest coverage. These measures aim to bolster the company’s credit profile while retaining Bitcoin as its primary reserve asset.
4. Market Reaction
STRC shares jumped 12% on the framework announcement and Bitcoin briefly topped $60,000 before retreating, reflecting investor approval of the new capital management strategy.
