coindesk.com
Strategy (MSTR) unveiled a new Digital Credit Capital Framework on Monday, introducing a series of capital management initiatives designed to strengthen its preferred securities, preserve long term bitcoin exposure, and improve balance sheet flexibility.
The company has already adopted a board approved U.S. dollar reserve policy and increased the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to 12%, effective for dividend periods beginning July 1. Strategy said its U.S. dollar reserve currently stands at approximately $2.55 billion, enough to cover about 17.4 months of preferred dividend and interest obligations.
The board also authorized, but did not commit to, up to $1 billion in repurchases of its Digital Credit Securities and up to $1 billion in buybacks of its Class A common stock. The programs have no fixed expiration date and may be modified, suspended, or terminated at any time. Actual repurchases will depend on market conditions and management's assessment that they are accretive.
In addition, Strategy approved a Bitcoin Monetization Program, allowing the company to sell BTC when management determines it is advantageous. Proceeds may be used to build or replenish the company's USD reserve, fund preferred dividends and interest payments, or finance share repurchases. The company emphasized that the program does not obligate it to sell any bitcoin.
Executive Chairman Michael Saylor said the framework is intended to strengthen Strategy's credit profile while maintaining bitcoin as its primary treasury reserve asset. CEO Phong Le described the move as a shift from primarily issuing capital to actively managing the company's capital structure through both issuance and repurchases, depending on market conditions.
MSTR shares are up 6% pre-market and bitcoin is above $60,000 on the announcement. STRC is higher by 9%, and bitcoin has risen modestly to $60,500.