Strategy adopted a Digital Credit Capital Framework built around preferred-stock liquidity, long-term Bitcoin exposure and more active capital management across MSTR and its Digital Credit Securities.
The framework has five parts: a board-approved USD reserve policy, a revised STRC dividend policy, a Digital Credit Securities repurchase program, a class A common stock repurchase program and a BTC monetization program.
The move lands after heavy pressure around Strategy’s preferred-stock complex, MSTR pricing and Bitcoin treasury model. The company’s capital structure had already become the center of market debate after Mike Novogratz rejected forced-seller fears and argued that Strategy had enough room to avoid a near-term Bitcoin sale.
Saylor’s own defense also came during a sharp selloff in Strategy-linked instruments, with MSTR weakening and STRC trading 25% below par before the new framework gave investors a more detailed look at how the company plans to manage preferred dividends, reserves and repurchases.
USD Reserve Covers 17.4 Months Of Obligations
Strategy had about $2.55 billion in its USD reserve as of June 28, including expected cash proceeds from shares sold through its at-the-market program that had not yet settled by that date.
The reserve may be used to pay preferred-stock dividends and interest on outstanding debt. Any other use requires board authorization. Strategy’s current expected annual preferred dividends and interest expense are about $1.76 billion, giving the reserve roughly 17.4 months of coverage.
The board also set a minimum USD reserve policy equal to at least 12 months of expected annual preferred dividends and debt interest. Falling below that level would require board approval.
Strategy added $1.25 billion of board-authorized reserve-building BTC monetization capacity. Combined with the USD reserve, the company has about $3.80 billion of current preferred dividend liquidity coverage, equal to about 25.9 months before repurchases, future dividend changes, taxes, transaction costs or market conditions affecting BTC monetization.
STRC Dividend Rises As Buyback Tools Open
Strategy will raise the regular STRC dividend rate to 12.00% per year for semi-monthly periods with record dates on or after July 1, 2026. The change does not affect previously declared but unpaid STRC dividends.
The company wants STRC to trade over time near $99 to $100, close to its $100 stated amount. That target comes after the STRC discount drew fresh criticism from Ripple CEO Brad Garlinghouse, who called the preferred-stock weakness a “damning indictment” of Strategy’s capital structure.
Strategy also authorized up to $1.0 billion of repurchases across its Digital Credit Securities, including STRC, STRF, STRD and STRK. STRC is expected to be the initial priority when management believes buybacks would be accretive and would strengthen the capital structure.
A separate $1.0 billion MSTR repurchase program gives Strategy room to buy back class A common stock when management believes the shares trade below intrinsic value. Neither repurchase authorization has a fixed expiration date, and neither requires the company to buy any specific amount.
BTC Monetization Formalizes Sale Flexibility
The BTC monetization program gives Strategy authority to sell Bitcoin from time to time for three purposes: building up to $1.25 billion for the USD reserve, funding or replenishing preferred dividends and debt interest when better than issuing common stock, and funding repurchases of Digital Credit Securities or MSTR.
The program does not require Strategy to sell Bitcoin, pay dividends through BTC sales or repurchase securities. Any Bitcoin sale remains subject to market conditions, liquidity needs, tax and accounting considerations, legal requirements and management’s assessment of long-term shareholder value.
That sale flexibility connects directly to the wider market debate over whether using part of the Bitcoin reserve could improve confidence. Grayscale’s research chief recently argued that a controlled Strategy Bitcoin sale could restore confidence if it reduced structural pressure and showed that the treasury model had practical liquidity tools.
Strategy also said future common equity issuance will be more disciplined when MSTR trades at or near 1x mNAV per share. MSTR recently traded near $82.31, while Bitcoin traded near $60,516, with the new framework giving Strategy $2.55 billion in USD reserve coverage and $1.25 billion in board-authorized reserve-building BTC monetization capacity.
Be the first to comment