Strategy has authorized up to $2 billion in share and preferred security repurchases and approved a Bitcoin monetization program that could generate up to $1.25 billion to bolster its USD reserve, as the software company moves to strengthen its capital structure and support its preferred stock offerings, according to a Digital Credit Capital Framework unveiled on Monday.
The framework includes a board-approved USD Reserve policy, an updated STRC dividend policy, a $1 billion preferred securities repurchase authorization, a $1 billion common stock buyback program, and a BTC monetization program.
Under the USD Reserve policy, reserve funds may only be used for preferred stock dividends and interest payments unless the board authorizes otherwise, as noted by Strategy.
Management must also maintain a reserve covering at least 12 months of expected preferred dividend and interest obligations. The USD Reserve stood at over $2.5 billion as of June 28, including unsettled ATM proceeds.
The company also revised its STRC dividend framework, with monthly evaluations based on market conditions, STRC pricing, credit spreads, Bitcoin volatility and pricing, reserve coverage, and broader capital structure considerations. Management emphasized that dividend increases will not automatically occur simply because STRC trades below its stated amount.
Strategy authorized repurchases of up to $1 billion of outstanding Digital Credit Securities, including STRC, STRF, STRD, and STRK, with STRC expected to receive initial priority where buybacks are deemed accretive. It separately approved a $1 billion Class A common stock repurchase authorization. Neither program will utilize the USD Reserve.
The board also approved a BTC Monetization Program permitting Bitcoin sales to fund up to $1.25 billion of the USD Reserve, support preferred dividend and interest payments or replenish the reserve when preferable to capital markets financing, and finance preferred security and common stock buybacks. Additional monetization outside of these purposes would require further Board approval.
Strategy holds off on Bitcoin purchases
In its weekly ATM update, Strategy reported selling about 12.7 million MSTR shares during June 22–28 for $1.1 billion in net proceeds, while no preferred securities were issued.
The company reported no Bitcoin purchases during the reporting period, leaving its holdings unchanged at 847,363 BTC, worth approximately $51 billion at current market prices.
Bitcoin edged higher after Strategy unveiled the new framework, rising from around $59,800 to nearly $60,700, on-chain data shows.