Strategy ' s latest disclosure indicates that the company has approved new capital arrangements that authorize a maximum of $1.25 billion in bitcoin sales, with an upward adjustment of STRC ' s priority dividends and continued to increase the cash reserve to cover dividends and interest. Market concerns have also shifted from continuous buy-in of bitcoin to more robust liquidity and financing structures.
The company disclosed that the proceeds of this potential sale could be used to increase cash reserves, pay priority dividends, fulfil obligations, and repurchase priority securities and category A general shares MSTR. At the same time, the annualized dividends of STRC have been increased from 11.5 per cent to 12 per cent.
Cash reserve raised to $2.55 billion
Strategy states that the cash reserve earmarked to cover priority dividends and interest expenditures has increased to $25.5 billion, covering approximately 17 months of related expenditure. Under the new policy, this part of the reserve can only be used for the above-mentioned obligations and may not be covered for less than 12 months without the approval of the Board.
According to the Executive Director, Michael Saylor, the existing cash reserves, combined with the newly approved bitcoin liquidity capacity, provide approximately $3.8 billion in sub-red coverage for nearly 26 months. He also stated that the company would exercise restraint when issuing new MSTR shares, especially when the stock price was close to approximately one times the revised net asset value (mNAV).
No new bitcoin bought last week
Despite the fact that Sailor had released a Bitcoin hold-up tracking map of Strategy over the weekend, which triggered the market ' s expectation of a new round of purchases, the company disclosed that no new bitcoin had been purchased during the week to Sunday.
To date, Strategy has maintained 847,363 BTCs at a total acquisition cost of approximately $64.1 billion at an average purchase price of $75,651 per unit. Even if the silos were not continued last week, the company has had a net increase of 3,625 BTCs since June, after having bought 3,657 and sold 32.
- Bitcoin holding: 847,363 BTC
- Total acquisition cost: approximately $64.1 billion
- Average purchase price: US$ 75,651
Financing models re-examined by the market
The paper also showed that Strategy had previously obtained some $1.15 billion in net financing through the sale of 12,670,000 shares of MSTR. This realignment of the framework is taking place at a time when external discussions on its financing model, priority stock structure and liquidity arrangements are on the rise.
Earlier this month, CryptoQuant proposed that Strategy should suspend the purchase of bitcoin and give priority to strengthening the balance sheet. The agency estimates that, after the annualized priority share-sharing obligation has risen to approximately $1.2 billion, companies will need about $2.8 billion in cash to restore their capacity to cover the bonus for almost two years.
In addition, critics have questioned whether it is sustainable to continue to rely on capital market finance to buy bitcoin if corporate securities prices are weak. Ripple CEO Brad Garlinghouse recently stated that the continued increase in the holding of bitcoin through the issuance of securities does not necessarily produce long-term value. Peter Schiff, who had long seen bitcoin, argued that Strategy might need to sell some bitcoin in the future to support stock buy-backs.
Additional information:The authority to sell bitcoin disclosed by the company does not amount to a completed sale; as of the latest week, the size of Strategy ' s warehouse remained unchanged.