"Strategy ($MSTR) announced Monday that it has created a $1.44 billion U.S. dollar reserve to safeguard future dividend and interest payments, a move aimed at calming investor concerns that the world's largest corporate Bitcoin holder might eventually need to sell a portion of its roughly $56 billion BTC stack if market weakness persists. The Tysons Corner, Virginia-based firm said the reserve, funded by recent Class A common stock sales, will initially cover at least 21 months of dividend obligations."
"Founder and Executive Chairman Michael Saylor said the cash reserve represents the next phase of the company's evolution, complementing its Bitcoin holdings and reinforcing its strategy of becoming the world's leading issuer of "Digital Credit." CEO Phong Le, whose comments last week sparked fears of a potential BTC sale, said the newly formed reserve sharply reduces the likelihood the company would need to liquidate any of its 650,000 BTC holdings."
"Strategy's market value to Bitcoin (mNAV) ratio - a key metric comparing enterprise value to Bitcoin holdings - had slipped to roughly 1.2 on Monday, inching closer to a level that historically raises concern among investors. On Friday, Le told a podcast audience that Strategy could sell Bitcoin only if mNAV dropped below 1.0, and only as a last resort. Investors reacted sharply early Monday to a bitcoin price sell-off, sending Strategy shares down more than 6% pre-market while Bitcoin fell roughly 6%."
Strategy created a $1.44 billion U.S. dollar cash reserve funded by recent Class A common stock sales to safeguard dividend and interest payments. The reserve will initially cover at least 21 months of dividend obligations and is intended to expand to cover as much as 24 months over time. The reserve aims to reduce the likelihood of liquidating Bitcoin amid the steepest monthly BTC decline since mid-2021 and to ease investor concerns about selling portions of its roughly $56 billion BTC stack. Michael Saylor said the cash complements Bitcoin holdings and advances the company's Digital Credit strategy. CEO Phong Le said the reserve greatly reduces the chance the company would need to liquidate any of its 650,000 BTC. Strategy's market value to Bitcoin (mNAV) ratio fell to about 1.2, and shares dropped on a bitcoin sell-off before paring losses after the reserve announcement.
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