Strategy, the software and business intelligence firm led by Michael Saylor, sold 2,732,318 shares of its Class A common stock last week, generating $263.5 million. According to a filing with the Securities and Exchange Commission on Monday, the company allocated these proceeds to its US dollar reserves rather than purchasing additional bitcoin.
Cash reserve expansion signals new approach
Following this move, Strategy increased its US dollar reserve to $3.225 billion as of July 19, marking a rise from $3 billion the previous week. The company chose not to acquire more bitcoin for the second straight week, maintaining its total holdings at 843,775 BTC.
The recent filing clarified that the expanded cash reserve exists to support upcoming dividend payments on the company’s preferred stock and to cover interest on its outstanding debt.
Strategy’s new capital framework established a policy requiring at least 12 months of dividend coverage by holding cash reserves, prompting a noticeable increase in the company’s cash position since late June.
A buyback program, introduced last month alongside the new capital strategy, was not utilized for any share repurchases over the past week.
Shift from bitcoin buying tradition
For years, Strategy was widely recognized for using nearly all of its excess capital to accumulate bitcoin. However, by choosing to retain the latest capital raised in cash instead of acquiring more cryptocurrency, the company has marked a significant change in its treasury approach.
The current dollar reserve has more than doubled from approximately $1.44 billion at the end of June, reflecting Strategy’s adjustment toward greater liquidity and risk management amid ongoing market fluctuations.
Mini dictionary: Strategy — A prominent US software company, previously known as MicroStrategy, that became the world’s largest corporate bitcoin holder through aggressive treasury investments in the cryptocurrency led by its executive chairman, Michael Saylor.
| Late June 2024 | July 19, 2024 | |
|---|---|---|
| US dollar reserves | $1.44 billion | $3.225 billion |
| Total bitcoin held (BTC) | 843,775 | 843,775 |
Recent market performance and company outlook
Shares of Strategy (MSTR) have decreased more than 40% so far this year and nearly 80% compared to the previous year. The company’s variable-rate STRC preferred stock has also slipped to nearly $87, falling below its intended $100 reference point.
Strategy’s shares recently traded at about 1.03 times the value of net assets, a level that eliminates much of the historic premium previously driving fundraising activities. Despite these developments, the company remains the largest corporate holder of bitcoin globally, having acquired its position at an average price of $75,476 per coin, substantially above the current market level.
Michael Saylor, Strategy’s founder and executive chairman, has modified his earlier “never sell” philosophy, now stating the company will continue to act as a net buyer of bitcoin over time, rather than maintaining an absolute hold-only approach.
Although Strategy paused new bitcoin acquisitions in recent weeks, Saylor has reiterated his long-term confidence in $BTC and the company’s broader digital asset strategy, focusing on net accumulation instead of immediate new purchases.
