Strategy has introduced a $2 billion buyback plan and a Bitcoin monetization program, increasing STRC dividends to 12%.
New capital management initiative approved to enhance liquidity and increase dividends.
Strategy (MSTR) has announced a comprehensive capital management plan, introducing a Digital Credit Capital Framework that allows for up to $2 billion in buybacks and a Bitcoin monetization program. This new strategy aims to bolster liquidity and enhance financial flexibility.
The board has approved a USD reserve policy, which will support a raised dividend for its preferred shares (STRC) to 12%, effective July 1. Currently, the company's USD reserves stand at approximately $2.55 billion, sufficient to cover around 17.4 months of preferred dividends and interest commitments.
In terms of stock repurchases, the board has authorized up to $1 billion for buying back preferred securities and another $1 billion for common stock, although these purchases are not mandatory and will depend on market conditions and management’s discretion.
Additionally, the company has initiated a Bitcoin Monetization Program, allowing it to sell Bitcoin as deemed appropriate by management. The proceeds from these sales can be used to strengthen reserves, fund dividends, or support stock buybacks, although there is no obligation to sell any Bitcoin.
Michael Saylor, Executive Chairman, emphasized that the objective of this framework is to enhance the company’s credit rating while keeping Bitcoin as the primary asset in its treasury. CEO Phong Le described this approach as a shift towards active management of the company’s capital structure, balancing issuance and repurchase strategies based on market dynamics.
Following the announcement, MSTR shares jumped 6% in pre-market trading, while Bitcoin rose above $60,000. STRC shares saw a 9% increase, with Bitcoin trading at approximately $60,500 shortly thereafter.
