Strategy may sell Bitcoin to support dividends and buybacks

Strategy has given itself formal room to sell Bitcoin to support preferred stock dividends, debt interest, and share repurchases, a shift that matters for BTC holders watching the largest public corporate Bitcoin treasury. The company said the move is part of a new capital framework meant to protect its balance sheet as weaker Bitcoin prices and discounted preferred securities have raised doubts about its funding model.

As of June 28, Strategy held 847,363 BTC worth about $50.7 billion, with an unrealized loss of more than $13 billion against its purchase cost. It said Bitcoin remains its main treasury reserve asset, but management can now use part of that reserve for liquidity if selling BTC looks better than issuing more stock or preferred securities.

The company reported a US dollar reserve of about $2.55 billion, enough to cover roughly 17.4 months of preferred dividends and interest expense based on current annual costs of about $1.76 billion. It also set a policy to keep at least 12 months of coverage. With $1.25 billion of authorized Bitcoin monetization capacity, total liquidity coverage rises to about $3.8 billion.

Strategy also approved up to $1 billion in repurchases for its preferred securities and another $1 billion for MSTR common stock. STRC's annual dividend rate was raised to 12% from 11.5%, though future dividends still need board approval.