TLDR
- Strategy’s USD reserve reached an all-time high of $4.65 billion, growing more than fivefold in 2.5 months.
- CEO Phong Le confirmed the milestone in an Aug. 10 post, citing the company’s Digital Credit Capital Framework.
- The reserve jumped from $871 million in late May to $4.65 billion, adding nearly $3.8 billion.
- Strategy sold 1,690 bitcoin for $108.6 million and used the money to buy back 1,152,020 STRC shares.
- The reserve now covers about 2.7 years of preferred dividends and debt interest payments.
Strategy’s cash reserve has reached a new record. The company’s USD reserve climbed to $4.65 billion, marking its highest level ever.
CEO Phong Le shared the news in an Aug. 10 post on X. He said the reserve and its duration both grew more than fivefold in just 2.5 months.
The reserve now provides about 2.7 years of coverage for preferred dividends and debt interest. Le called it proof that the company’s Digital Credit Capital Framework is working as planned.
How the Reserve Grew
The growth has been fast. In late May, the reserve stood at only $871 million.
By July 27, it had grown to $3.75 billion after the company added $525 million. That gave the company about 2.1 years of dividend and interest coverage at the time.
The company also repurchased $25 million worth of STRC shares during that period. The reserve kept climbing after that, reaching $4 billion before hitting the current $4.65 billion mark.
An Aug. 10 filing with regulators showed the company added another $650 million to the reserve. That single addition pushed the total from $4 billion to $4.65 billion.
Bitcoin Sale and Share Buyback
Separate from the reserve growth, Strategy also sold bitcoin last week. Between Aug. 3 and Aug. 9, the company sold 1,690 bitcoin for $108.6 million.
The company used that money to buy back 1,152,020 shares of STRC. This was treated as a separate action from the cash reserve buildup.
The Digital Credit Capital Framework allows the company to sell bitcoin under certain conditions. The framework lets bitcoin sales support share repurchases and other funding needs.
The board set a rule for the minimum reserve size. It must equal at least 12 months of expected preferred dividends and interest costs, unless a lower amount is approved.
This cash buffer has taken on a bigger role as the company’s obligations have grown. Before the latest jump, the reserve had already reached $3.2 billion.
The company has used a mix of tools to build its cash position. These include selling new shares, issuing preferred securities, and selling small amounts of bitcoin when needed.
The bitcoin sale did not go toward the cash reserve itself. Instead, the funds went directly into the STRC share buyback program.
As of Aug. 10, the USD reserve sits at $4.65 billion with about 2.7 years of duration. This is the highest level the reserve has reached since the framework began.
The post Strategy USD Reserve Climbs to $4.65 Billion After Bitcoin Sale appeared first on Blockonomi.
Source: https://blockonomi.com/strategy-usd-reserve-climbs-to-4-65-billion-after-bitcoin-sale/
Be the first to comment