Strategy disclosed that the board has approved a new "Digital Credit Capital Framework," permitting the company to sell Bitcoin under specific circumstances to replenish U.S. dollar reserves, pay preferred stock dividends and debt interest, and repurchase certain securities. The company has also increased the annualized dividend rate of STRC to 12%.
Founder and Executive Chairman Michael Saylor stated that the company will continue to hold Bitcoin as its primary treasury reserve asset. However, under the new capital structure, Bitcoin is also being incorporated as a more active liquidity management tool. Following the announcement, MSTR rose as much as 4.94% in pre-market trading to $86.38.
Dollar reserves increased to $2.55 billion
The company disclosed that the new reserve policy stipulates that U.S. dollar reserves may only be used to pay preferred dividends and interest on outstanding debt; any other uses require separate approval by the board of directors.
Based on the company’s current estimates, annual preferred dividends and interest expenses amount to approximately $1.76 billion. With this calculation, the $2.55 billion reserve can cover approximately 17.4 months of expenses. The board has also established a minimum reserve requirement of at least 12 months’ worth of expected dividends and interest expenses; any level below this threshold requires board authorization.
STRC dividend yield rises to 12%
Strategy has increased the annualized dividend rate for the Variable Rate Series A Perpetual Preferred Stock STRC to 12.00%, effective for the biweekly dividend periods with record dates on or after July 1, 2026.
The company states that its goal is to maintain STRC’s long-term trading price around $99 to $100, close to its $100 par value. However, the company also cautions that STRC’s actual trading price may deviate from this range and could even be significantly below par value.
Strategy also stated that dividends will not be automatically increased solely because the STRC price is below par value. Any related dividends still require board approval and are not guaranteed.
Approve a $2 billion buyback program
The company disclosed that the board has approved a repurchase program of up to $1 billion for digital credit securities, covering STRC, STRF, STRD, and STRK. Management stated that, if repurchases are accretive, the initial focus may be on STRC.
In addition, the board separately approved a share repurchase program for up to $1 billion of MSTR Class A common stock. Repurchases may be made through open market purchases, block trades, privately negotiated transactions, tender offers, or other lawful means.
The company emphasized that the related buyback will not use U.S. dollar reserves. If the buyback funds come from the sale of Bitcoin, they will be included in the new Bitcoin monetization plan.
Bitcoin can be used for reserve replenishment and repurchase.
Pursuant to board authorization, Strategy may sell Bitcoin through a Bitcoin monetization program, primarily for three purposes: increasing its U.S. dollar reserves by up to $1.25 billion, paying preferred dividends and interest expenses, and funding digital credit securities or MSTR repurchases.
The company stated that this plan does not imply an obligation to sell Bitcoin; the decision to sell will depend on market conditions, liquidity needs, tax and accounting considerations, legal requirements, and management’s judgment regarding long-term shareholder value.
Chief Financial Officer Andrew Kang said this arrangement provides the company with greater flexibility to use its Bitcoin reserves to support digital credit and implement buybacks, in addition to traditional equity financing. According to the company’s figures, with its existing $2.55 billion in reserves and an additional authorization of up to $1.25 billion for reserve replenishment, the current reserves are sufficient to cover approximately 25.9 months of preferred dividend and interest payments.
Additional information: Phong Le, CEO of Strategy, stated that the company is shifting from passive fundraising to active capital management—issuing securities when financing conditions are favorable and repurchasing them when market prices are appropriate.