Strategy Inc. (MSTR), formerly known as MicroStrategy, saw its stock climb 2.7% on Monday following the announcement of a sweeping capital management overhaul designed to bolster liquidity, support its preferred securities, and maintain its substantial Bitcoin exposure.
The new framework comes after a period of valuation pressure, during which the company's market capitalization fell below the value of its Bitcoin holdings. This caused its market-cap-to-Bitcoin-net-asset-value ratio to dip below 1.0, drawing criticism from market participants who questioned the sustainability of the company's capital model.
Five-Part Capital Framework
Strategy outlined a five-part plan that marks a shift from what CEO Phong Le described as “one-way capital issuance to active capital management.” The components include:
- A $1 billion preferred securities repurchase program
- A separate $1 billion Class A common stock buyback program
- A structured Bitcoin monetization program
- A revised dividend policy for its STRC preferred stock
- A formal USD Reserve policy
Founder Michael Saylor said the framework is “designed to strengthen credit quality and enable the Company to reduce expected preferred stock dividend payments when accretive.”
USD Reserve and Bitcoin Monetization
Strategy reported its USD Reserve stood at approximately $2.55 billion as of June 28, 2026. Under the newly approved board policy, those funds may only be used to support preferred stock dividend payments and interest on outstanding debt. The company has set a minimum reserve requirement equal to 12 months of annual preferred stock dividends and interest expenses, representing about $1.76 billion.
When combined with $1.25 billion of board-authorized Bitcoin monetization capacity, total preferred stock dividend liquidity coverage reaches approximately $3.80 billion, or roughly 25.9 months of coverage. The Bitcoin monetization program allows Strategy to sell Bitcoin for three approved purposes: generating up to $1.25 billion to support the USD Reserve, funding preferred stock dividends and interest expenses when management determines selling Bitcoin is more advantageous than issuing equity, and financing repurchases of Digital Credit Securities or common stock. Any Bitcoin monetization outside these purposes would require additional board authorization.
CFO Andrew Kang stated, “Bitcoin is capital. This program gives Strategy the flexibility to use a portion of its BTC Reserve to strengthen Digital Credit, fund dividend payments and interest expense, and fund accretive repurchases when BTC monetization is more advantageous than issuing common equity.”
Dividend Increase and Buyback Programs
As part of the framework, Strategy raised the dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to 12% annually, effective for semi-monthly periods with record dates on or after July 1, 2026. The company aims for STRC to trade close to its stated value of $100 over time.
Strategy also established a $1 billion repurchase program covering its Digital Credit Securities, including STRC, STRF, STRD, and STRK, with STRC expected to receive initial priority. A separate $1 billion Class A common stock repurchase program was announced alongside the preferred securities buyback.
The moves come amid a broader market environment where Bitcoin has stalled near $62K, influenced by oil price surges and Federal Reserve caution. Meanwhile, Standard Chartered has reaffirmed a $100K Bitcoin target, adding to the narrative around Strategy's digital asset strategy.
This article is for informational purposes only and does not constitute financial advice.
