STRC and MSTR Stock Jump 6-10% as Strategy Announces Digital Credit Framework

Key Insights

• Strategy’s new Digital Credit framework aims to boost liquidity, preserving long-term Bitcoin exposure.
• The company also raised the STRC stock dividend to 12% and expanded its USD reserve to $2.55 billion.
• It authorized up to $1 billion each in buybacks of MSTR stock and Digital Credit securities.

After a brutal correction last week, MSTR and STRC stock prices bounced back strongly. They were up 6-10% in pre-market trading on Monday, June 29.

This comes as Michael Saylor’s firm, Strategy, announces a Digital Credit Capital Framework to protect capital, liquidity, and BTC exposure. After facing major industry-wide criticism, Strategy is focusing on measures to curb investor panic as stock prices are in free fall.

After correcting by nearly 20-30% last week, both stocks are getting a breather. The MSTR stock is up 6.48% in pre-market, while the STRC stock price is up by 9.24%. This happened as Michael Saylor’s Strategy announced its new Digital Credit Capital Framework.

The goal behind it is to boost the company’s Digital Credit business, enhance liquidity, and preserve long-term Bitcoin exposure. Besides, it also aims to create additional shareholder value.

As part of the plan, the company increased its U.S. dollar reserve to $2.55 billion. That can provide 17.4 months of dividend coverage.

Strategy said the reserve will be used exclusively for dividend payments and interest expenses. Furthermore, the company will maintain a minimum reserve equivalent to 12 months of coverage.

The major reason behind the STRC price jump is that the company raised the dividend rate. That surged by 50 basis points to 12.00%, effective for July 2026 record dates. Strategy said it will review the dividend rate monthly, with the long-term objective of keeping STRC trading within the $99 to $100 range.

Following the announcement, the STRC stock price has bounced back above $80. However, Strategy still has a long way to go to bring it closer to its $100 par value.

Strategy also approved share repurchase programs of up to $1 billion each for its Digital Credit securities and MSTR shares. The company said that this buyback program will provide greater flexibility to repurchase MSTR stock during times of distress. More importantly, the company will not be using its USD reserves for the same.

While undertaking key measures for capital and liquidity, Strategy has introduced a Bitcoin Monetization Program. This would allow the company to sell BTC to fund its USD reserve.

This plan would also address its dividend and interest obligations and repurchases of Digital Credit securities and MSTR shares. However, the company has capped reserve building through Bitcoin sales at $1.25 billion.

Strategy has total dividend coverage of $3.8 billion, including the expanded USD reserve and Bitcoin monetization capacity. This is enough to take care of the next 26 months.

Speaking on the development, Michael Saylor said, “Strategy expects to remain disciplined in its use of MSTR issuance, particularly when the stock trades at or near 1x mNAV.”

Being the largest Bitcoin holding firm, Strategy has a massive reserve of 847,363 BTC. That’s worth more than $50 billion as of the current BTC price. Furthermore, Michael Saylor just hinted that they won’t lose focus on additional Bitcoin purchases.

With a massive pool of Bitcoin holdings, selling $1.25 billion worth of Bitcoin shouldn’t be much of an issue. However, last time Strategy sold 32 BTC in June, Bitcoin price came under strong selling pressure.

Speaking on it, Peter Schiff wrote: “If Saylor crushed Bitcoin when he announced the sale of just 32 Bitcoin, imagine the impact of today’s announcement authorizing MSTR to sell $3.25B worth of Bitcoin. At $60K, that’s over 54,000 Bitcoin. Of course, as Bitcoin falls, more must be sold to raise that dollar amount”.

The post STRC & MSTR Stock Jump 6-10% As Saylor’s Strategy Takes Big Measures appeared first on The Market Periodical.