business
Strategy Adopts Digital Credit Framework With $2 Billion Buybacks and 12% Dividend
Strategy approved a Digital Credit Capital Framework on June 29 authorizing up to $1 billion each in preferred securities and Class A common stock repurchases. The company also raised its preferred stock dividend rate to 12 percent effective July 1.
DE
LO
EM
themandarin.com.auAudio version
Tap play to generate a narrated version.
Strategy adopted a Digital Credit Capital Framework on June 29 that includes a board-approved U.S. dollar reserve policy and authorizes up to $1 billion in repurchases of its preferred securities along with up to $1 billion in Class A common stock buybacks.
The company raised the annual dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock to 12 percent, effective for dividend periods beginning July 1.
Its existing U.S. dollar reserve stands at approximately $2.55 billion, sufficient to cover about 17.4 months of preferred dividend and interest obligations. The repurchase programs carry no fixed expiration and may be modified, suspended, or terminated at any time.
Actual purchases will depend on market conditions and management's judgment that the transactions are accretive. Strategy also approved a Bitcoin Monetization Program that permits future sales of bitcoin when management determines such sales are advantageous.
Proceeds from any bitcoin sales may be directed toward building or replenishing the dollar reserve, funding preferred dividends and interest payments, or financing share repurchases.
The program does not obligate the company to sell any bitcoin. Executive Chairman Michael Saylor said the framework is intended to strengthen Strategy's credit profile while maintaining bitcoin as its primary treasury reserve asset. CEO Phong Le described the actions as a shift from primarily issuing capital to actively managing the company's capital structure through both issuance and repurchases.
MSTR shares rose 6 percent in pre-market trading after the announcement. STRC shares gained 9 percent. Bitcoin traded above $60,000 and later reached $60,500.
