Strategy (MSTR) on Monday introduced a new Digital Credit Capital Framework, laying out capital management steps aimed at supporting its preferred securities, preserving long-term bitcoin exposure, and giving the balance sheet more flexibility. The company said it has already adopted a board-approved U.S. dollar reserve policy and raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock, STRC, to 12% for dividend periods beginning July 1.
Strategy said its U.S. dollar reserve currently totals about $2.55 billion, an amount it described as enough to cover roughly 17.4 months of preferred dividend and interest obligations. That reserve figure is central to the new framework. It shows the company is trying to keep bitcoin as its main treasury reserve asset while also building a larger cash buffer for fixed obligations.
Board approves buyback authority for securities and stock
The board also authorized, without committing to execute, up to $1 billion in repurchases of the company’s Digital Credit Securities and up to $1 billion in buybacks of its Class A common stock. Neither program has a fixed expiration date. Strategy said both may be modified, suspended, or terminated at any time.
Actual repurchases will depend on market conditions and on management’s view that the transactions are accretive. That leaves the company broad room to decide when, or whether, to step into the market. The change is notable because Strategy is framing capital allocation as a two-way process, with issuance and repurchases both available depending on pricing and conditions.
Bitcoin sales allowed under new monetization program
Alongside the buyback authorizations, Strategy approved a Bitcoin Monetization Program that allows the company to sell BTC when management decides doing so is advantageous. Proceeds may be used to build or replenish the firm’s U.S. dollar reserve, fund preferred dividends and interest payments, or finance share repurchases. The company said clearly that the program does not obligate it to sell any bitcoin.
Executive Chairman Michael Saylor said the framework is meant to strengthen Strategy’s credit profile while keeping bitcoin as its primary treasury reserve asset. CEO Phong Le described the move as a shift away from a model centered mainly on capital issuance toward active capital structure management using both issuance and buybacks as market conditions change.
Market reaction lifts MSTR, STRC and bitcoin
Following the announcement, MSTR shares rose 6% in pre-market trading and STRC gained 9%. Bitcoin was trading above $60,000 on the news and later moved up modestly to $60,500. The immediate reaction pointed to investor focus on the higher dividend rate, the enlarged reserve coverage, and the company’s added flexibility around repurchases and potential BTC sales.