MSTR stock price rose alongside STRC after Strategy gave itself a formal path to sell BTC▼$58,532.00 while trying to support its preferred-stock stack.
Strategy, the largest corporate holder of Bitcoin, said on Monday, June 29, that its board approved a new plan that gives the company more ways to manage cash, support its preferred shares, buy back stock and, if needed, sell Bitcoin.
With the new “Digital Credit Capital Framework,” Strategy can now sell BTC to raise up to $1.25 billion for its U.S. dollar reserve, which had around $2.5 billion as of June 28.
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That amount can cover approximately 17.4 months of expected preferred-stock dividends and interest expenses, per the press release. Strategy also established a minimum reserve policy of 12 months of coverage.
On top of the new trading strategy, the company also authorized up to $1 billion in repurchases of Digital Credit Securities, including STRC, STRF, STRD and STRK, and up to $1 billion in MSTR common-stock repurchases. But neither program forces the company to buy anything.
STRC Dividend Rises
Strategy also raised the annual dividend rate on STRC, its variable-rate preferred stock, to 12% from July 1. The company aims for STRC to trade near $99 to $100, but it cautioned that there is no guarantee the preferred shares will stay in that range.
After the news broke, STRC rose 12.2% to $83.6 on June 29, while MSTR closed at $92.68, up 12.6%, per data from Google Finance.
Market Reaction
However, the announcement got mixed reaction in crypto circles. Some, like crypto investment firm Delphi Digital, said the framework makes Bitcoin sales part of the company’s operating toolkit, noting that “the new framework makes it routine.”
Tom Lee’s Ethereum treasury firm Bitmine called the larger capital buffer “smart,” arguing it could help Strategy stand through Bitcoin’s volatility.
But others saw the move as a red flag for BTC holders. For instance, macro analyst Donaxbt wrote in an X post that Strategy has now become “burden to all Bitcoin holders and new buyers,” arguing Saylor may sell BTC when markets get stressed.
Yet, Strategy presented the plan in another light, with Andrew Kang, the company’s chief financial officer, saying Bitcoin is now “capital” for the company, allowing it to meet its financial obligations.
Read more: Corporate Buyers Keep Accumulating Crypto — Strategy and Sharplink Add Bitcoin and Ethereum
