Strategy Unveils Digital Credit Capital Framework With Buyback Authority and BTC Monetization

Strategy has put in place a new Digital Credit Capital Framework that greenlights repurchases totaling as much as $2 billion while setting up a mechanism for selective bitcoin sales to meet liquidity requirements.

Strategy raises STRC dividend and sets USD reserve policy. Directors lifted the annual payout on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to 12 percent, starting with periods after July 1. The firm reported a U.S. dollar reserve of approximately $2.55 billion that would cover roughly 17.4 months of preferred dividends and interest costs. Officials have also instituted a board-approved dollar reserve policy under the framework.

Board authorizes up to $2 billion in repurchase programs. The board cleared as much as $1 billion for repurchases of Digital Credit Securities plus another $1 billion for Class A common stock buybacks. Neither initiative requires the company to act. Both lack a preset end date, can be altered, paused or ended whenever directors choose, and will proceed only when market conditions and management deem the transactions accretive.

Bitcoin monetization program approved for liquidity needs. Strategy greenlit a Bitcoin Monetization Program permitting BTC sales at times management views as favorable. Resulting cash can replenish the dollar reserve, cover preferred dividends and interest, or help pay for share repurchases. Executives stressed the plan creates no duty to sell any bitcoin.

Framework aims to strengthen credit while preserving bitcoin holdings. 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.

Market reaction follows the announcement. MSTR shares are up 6 percent pre-market. STRC is higher by 9 percent. Bitcoin has risen modestly to $60,500.