MicroStrategy's Self-Rescue: $1.25B Bitcoin Sale Plan Emerges
MicroStrategy has been forced to abandon its long-standing 'buy-and-hold-only' Bitcoin strategy amid a severe downturn that has resulted in over $13 billion in unrealized losses, a market-to-NAV (mNAV) ratio falling below 1, and a steep discount on its STRC convertible preferred shares. The company has now introduced a 'Digital Credit Capital Framework' to repair its credit profile and restart funding channels.
Key Measures Under the Digital Credit Capital Framework
According to disclosures, the framework includes: $2.55 billion in cash reserves; a raise of the STRC annual interest rate to 12%; up to $1 billion in preferred stock buybacks; up to $1 billion in common stock repurchases; and a $1.25 billion Bitcoin liquidation plan. These measures are designed to stabilize market confidence in the short term and ensure the company's survival for at least two years.
The $1.25 billion Bitcoin sale marks the first major reduction of MicroStrategy's Bitcoin holdings in its history, signaling a strategic pivot from 'unwavering holding' to 'active liquidity management' under extreme market conditions.