Strategy disclosed that its board has approved a new capital management framework, which includes a share repurchase authorization of up to $2 billion and an arrangement to sell Bitcoin in the future. The company stated that this mechanism is designed to enhance balance sheet flexibility while continuing to hold Bitcoin as its primary treasury reserve asset.
The repurchase quota is divided into two parts.
As disclosed, the repurchase authorization is divided into two components: up to $1 billion for repurchasing senior securities and an additional up to $1 billion for repurchasing Class A common stock. Neither program has a fixed expiration date, and the company is not obligated to execute any repurchases; future repurchases will depend on market conditions and management’s discretion.
The Strategy states that if management believes repurchases can enhance shareholder value, the plan may be initiated and executed; meanwhile, these arrangements may also be modified, suspended, or terminated.
Bitcoin can be sold when needed.
The company has also approved a "Bitcoin monetization plan." Under this arrangement, management may sell a portion of its BTC at its discretion, with the proceeds used to replenish or rebuild U.S. dollar reserves, pay dividends and interest on preferred shares, or fund share repurchases.
The strategy emphasizes that this plan merely provides operational flexibility and does not imply that the company must sell Bitcoin. The company will continue to regard Bitcoin as its primary treasury reserve asset.
USD reserves of approximately $2.55 billion
The company disclosed that its board has approved a U.S. dollar reserve policy, with current U.S. dollar reserves totaling approximately $2.55 billion. According to the company’s metrics, this level is sufficient to cover approximately 17.4 months of preferred dividend and interest payments.
Meanwhile, Strategy has increased the annualized dividend rate for the Series A variable-rate perpetual preferred shares (STRC) to 12%, effective for the dividend period beginning July 1.
- Preferred Stock Repurchase Authorization: Up to $1 billion
- Class A Common Stock Repurchase Authorization: Up to $1 billion
- Current USD reserves: approximately $2.55 billion
Management stated it will proactively manage the capital structure.
Executive Chairman Michael Saylor stated that the new framework aims to enhance Strategy’s credit profile while maintaining Bitcoin’s central role in the company’s treasury. CEO Phong Le noted that the company is shifting from a financing model primarily reliant on issuances to a more proactive approach that utilizes both issuances and buybacks based on market conditions to better manage its capital structure.
After the announcement, Strategy's pre-market stock price rose approximately 6%, and STRC increased by about 9%. Bitcoin prices also edged higher, reaching around $60,500.
Additional information: The company stated that proceeds from Bitcoin sales can not only replenish U.S. dollar reserves but also be used directly to pay preferred stock dividends and interest, indicating a tighter integration of its Bitcoin treasury with capital and liability management.