Strategy raises STRC dividend, approves $2B buybacks and BTC plan

Strategy, led by Michael Saylor, raised the annual dividend on its STRC preferred shares to 12%, authorized $2 billion in combined buybacks and introduced a Bitcoin monetization program after STRC dropped to $71.25 on June 26.

The board adopted a dollar reserve policy, approved up to $1 billion in repurchases for STRC, authorized a separate $1 billion common-stock buyback and created a program that allows restricted sales of some Bitcoin holdings.

The announcements preceded a market rebound. Strategy’s common stock rose about 18% to near $100, and STRC gained about 17% to roughly $87 in the days after the package was disclosed.

Strategy’s preferred securities carry regular dividend obligations. The company also has about $6.7 billion of convertible debt maturing in 2027 and 2028, leaving its financing exposed to swings in Bitcoin prices, equity market access and investor demand for its securities.

Alex Thorn of Galaxy Digital wrote in an investor note that the framework gives Strategy additional tools to support its capital stack during periods of weak Bitcoin prices and stress in preferred securities, but he added the changes do not remove the underlying pressures on the balance sheet.

Jeff Dorman, chief investment officer at Arca, described the package as a temporary fix that may postpone the debate over Strategy’s capital structure for a year or two unless market conditions change materially.

The Bitcoin monetization program would permit limited sales of BTC to generate cash. Industry participants do not expect the company to become a large seller. Matt Hougan, chief investment officer at Bitwise, expects Strategy lacks a mechanism to sell more than a few billion dollars of Bitcoin per year and could remain a net buyer if prices rally.

Analysts outlined alternatives that could generate income from the Bitcoin holdings without heavy spot sales. Suggested approaches include lending a small, segregated portion of holdings under conservative terms or using options strategies to harvest volatility while preserving most upside. Those options would introduce counterparty, custody and duration risks or cap gains if used aggressively.

CEO Phong Le has discussed Bitcoin lending with banks and has waited for larger financial institutions to enter the market before committing. Increased institutional activity from banks, asset managers, pensions and sovereign investors may provide more counterparties and ways to earn income from the company’s Bitcoin holdings.

Investors will monitor whether Strategy can meet its preferred dividend commitments, address upcoming convertible debt maturities and maintain access to equity markets while retaining exposure to its Bitcoin position.