Strategy announced a new Digital Credit Capital Framework on Monday that authorizes Bitcoin sales and up to $2 billion in share repurchases to support dividends and strengthen its capital structure.
The company, formerly known as MicroStrategy, said it has built a $2.55 billion U.S. dollar reserve as of June 28. The reserve is intended to cover preferred dividends and interest payments for about 17.4 months.
Strategy also raised the dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock, known as STRC, to 12 percent from 11.5 percent starting July 1. The board authorized $1 billion for repurchases of preferred securities and another $1 billion for Class A common stock.
In addition, the firm approved a Bitcoin monetization program with capacity to sell up to $1.25 billion worth of the cryptocurrency. Proceeds could fund the reserve, dividends, interest or buybacks, though sales are not required.
Chief Executive Officer Phong Le said the moves mark a shift toward actively managing the capital structure by issuing or repurchasing securities depending on market conditions. MSTR shares rose after the announcement.
