MicroStrategy to Monetize $1.25B Bitcoin and Raise STRC Dividend

MicroStrategy filed an 8-K on Monday introducing a Digital Credit Capital Framework that allows the company to sell up to $1.25 billion of Bitcoin to increase cash reserves, pay dividends, cover debt costs and repurchase securities while maintaining its long-term Bitcoin strategy. The filing raises the annual dividend on STRC preferred stock to 12% from 11.5% and authorizes separate buyback programs for preferred securities and Class A MSTR common stock.

The company reported a cash reserve of $2.55 billion, which it says covers about 17 months of preferred stock dividends and interest payments. Under the new policy, the reserve must be maintained at a minimum level equal to 12 months of payments unless the board approves otherwise. MicroStrategy stated that the existing reserve, combined with the $1.25 billion monetization capacity, provides up to $3.8 billion in dividend coverage, or nearly 26 months. Executive chairman Michael Saylor wrote in the filing, “MicroStrategy expects to remain disciplined in its use of MSTR issuance, particularly when the stock trades at or near 1x mNAV.”

The company reported volatile trading in its securities this year. MSTR shares have fallen nearly 50% year-to-date. The STRC preferred security traded as low as $71.25 and was described in the filing as trading at about a 28.75% discount to par. Before Monday’s Nasdaq open, MSTR shares rose more than 5.5%.

MicroStrategy reported no Bitcoin purchases in the week ended Sunday, leaving its holdings unchanged at 847,363 BTC. The filing shows those holdings were acquired for a combined $64.1 billion at an average price of $75,651 per coin. The company added a net 3,625 BTC so far in June after buying 3,657 BTC and selling 32 BTC earlier in the month. The filing also disclosed that MicroStrategy raised roughly $1.15 billion in net proceeds by selling 12.67 million MSTR shares.

The filing references external commentary suggesting larger sales to meet cash needs; one industry analyst recommended selling about $3 billion of Bitcoin to cover obligations. MicroStrategy’s framework sets a capped monetization capacity and formalizes how cash reserves and dividend coverage are managed.

MicroStrategy remains the largest publicly traded company holding Bitcoin as a treasury asset. The framework establishes a mechanism to convert a portion of that treasury into cash for near-term obligations while retaining the company’s longer-term Bitcoin position.