Key facts
- MicroStrategy authorized an additional $2 billion in share buybacks for its Class A common stock.
- The company raised the dividend for its STRC preferred shares to 12%.
- A new Digital Credit Capital Framework was adopted, including a USD reserve policy.
- The framework permits limited bitcoin sales to fund reserves, dividends, debt obligations, and stock repurchases.
- MicroStrategy may sell up to $1.25 billion in Bitcoin under its 'BTC Monetization Program'.
MicroStrategy has unveiled a new "Digital Credit Capital Framework" that allows for the monetization of a portion of its Bitcoin holdings to fund dividends, increase cash reserves, and repurchase securities, while aiming to maintain its long-term Bitcoin strategy. The company raised the annual dividend rate for its STRC preferred stock to 12% from 11.5% and authorized separate buyback programs for preferred securities and its Class A common stock, with an additional $2 billion authorization for common stock buybacks.
Under the new framework, MicroStrategy may sell up to $1.25 billion in Bitcoin to bolster its cash reserve, cover dividend and interest payments, and fund stock buybacks. The company stated its cash reserve has grown to $2.55 billion, which it estimates is sufficient to cover approximately 17 months of preferred stock dividends and interest payments. Combined with the Bitcoin monetization capacity, this provides up to $3.8 billion in dividend coverage, or nearly 26 months.
MicroStrategy also reported that it did not acquire any Bitcoin during the week ended Sunday, leaving its holdings unchanged at 847,363 BTC, acquired for $64.1 billion at an average price of $75,651 per coin. The company disclosed raising approximately $1.15 billion in net proceeds from selling 12.67 million MSTR shares.