Strategy sold about $466.7 million of MSTR common stock last week and did not add to its Bitcoin holdings, according to an 8-K filing submitted to the U.S. Securities and Exchange Commission. The company used the raise mainly to increase its U.S. dollar cash reserves, which reached $3 billion as of July 12.
Share sale brought in $466.7 million
The filing shows Strategy sold 4,818,781 MSTR shares between July 6 and July 12, raising about $466.7 million. During the same period, the company neither bought nor sold any Bitcoin.
Most of the proceeds went to cash reserves. Strategy said its U.S. dollar reserve increased by about $450 million and stood at $3 billion by July 12.
Bitcoin holdings stayed at 843,775 BTC
Data published by co-founder and executive chairman Michael Saylor shows Strategy still holds 843,775 BTC, valued at about $53 billion. The position was unchanged.
The company’s aggregate purchase cost, including fees and related expenses, is about $63.7 billion, with an average cost basis of roughly $75,476 per Bitcoin. At current market prices, that leaves an unrealized loss of about $10.7 billion.
Strategy’s holdings account for about 4% of Bitcoin’s 21 million total supply.
New framework limits cash use and adds buyback authority
Strategy recently introduced what it calls a “Digital Credit Capital Framework,” which limits the use of U.S. dollar cash reserves to preferred dividend payments and interest expenses. The company also authorized a $1 billion digital credit securities repurchase program, with STRC preferred shares set as the initial priority.
Separately, the board approved another $1 billion authorization for MSTR repurchases and confirmed a new Bitcoin monetization plan. Under that plan, the company may sell part of its Bitcoin holdings over time, with expected cash proceeds of up to $1.25 billion.
Analysts see no near-term liquidity stress
Gabe Selby, head of research at CF Benchmarks, a Payward subsidiary, said Strategy has no near-term debt servicing problem. He said the company’s annual financing cost is about 3.4% of the value of its Bitcoin holdings. Based on current cash reserves, Strategy has enough dollar liquidity to cover about 17.4 months of financing costs. If already authorized but unused reserve expansion capacity is included, that coverage could extend to 25.9 months.
Selby said the more important question is whether Strategy will keep selling assets to maintain its capital structure. He said, “Strategy’s sale of Bitcoin matters because the expansionary capital structure brought by STRC requires some monetization to maintain liquidity. What investors should worry about is when ‘selling Bitcoin’ stops being a choice and becomes a recurring necessity to keep the capital structure functioning.”
Matthew Sigel, head of digital assets research at VanEck, said Strategy’s earlier sale of 3,588 BTC was not counted against the limit of the Bitcoin monetization plan. That means the company’s actual future sale capacity could be higher than the $1.25 billion cap currently assumed by the market.
Wall Street response was broadly positive
Benchmark and TD Cowen both viewed the company’s decision not to buy more Bitcoin as constructive rather than negative. In their view, lifting dollar reserves to $3 billion while keeping Bitcoin holdings at 843,775 BTC shows Strategy is carrying out the financial strategy it outlined earlier and putting more emphasis on balance-sheet strength and confidence in its preferred-stock funding model.
TD Cowen kept its Buy rating
TD Cowen reiterated a Buy rating on Strategy and kept its $260 price target. Analyst Lance Vitanza’s team said the 8-K filing is an important sign that management has begun executing the capital allocation strategy presented to the market two weeks ago.
The firm highlighted three points: a clear increase in U.S. dollar reserves, no additional Bitcoin purchases last week, and a stronger focus from management on balance-sheet discipline instead of aggressive short-term Bitcoin accumulation.
TD Cowen said the lack of new Bitcoin purchases should not be read as a negative signal. The key issue now is whether Strategy can keep increasing the value of “Bitcoin per Share” while maintaining stability in its preferred equity capital structure.
Benchmark called it a “dividend war chest”
Benchmark also maintained a Buy rating on Strategy and set a $570 price target. Analyst Mark Palmer described the capital raise as building a “Dividend War Chest.”
He said Strategy’s U.S. dollar cash reserves rose about 18% in one week to $3 billion, enough to cover annual dividend obligations for as long as 20 months. In his view, that should help ease investor concerns that the company may need to return to capital markets frequently to meet obligations tied to preferred shares and convertible debt.