Strategy unveils $1B buybacks and 12% STRC dividend
Strategy announced up to $1B buybacks for MSTR and STRC, a ~12% STRC dividend, a $2.55B cash buffer and the option to sell up to $1.25B of Bitcoin.
On Monday, Strategy filed a new capital framework in an 8-K that authorizes up to $1 billion in buybacks for MSTR, up to $1 billion in buybacks for STRC and related securities, raises STRC’s dividend to roughly 12% on a $100 par value, expands a cash buffer to $2.55 billion and allows the sale of up to $1.25 billion in Bitcoin to meet dividend or debt obligations. Both STRC and MSTR shares rose more than 12% in after-hours trading following the filing, with STRC trading around $84.86 after the move.
STRC is a perpetual preferred security that Strategy describes as paying its dividend from cash reserves and a Bitcoin-linked capital plan. It sits between common equity and debt-like instruments. MSTR remains the company’s common stock and carries voting rights and residual equity exposure.
The filing sets an order of operations for stressed conditions: use cash reserves and buybacks first, deploy the increased liquidity buffer, and monetize Bitcoin when necessary to satisfy senior claims and dividend obligations. The company included the Bitcoin-sale option as a contingency to ensure funds for dividends and debt if other sources are insufficient.
The company announced the framework after Bitcoin fell below $60,000 and following a decline in its share price from earlier highs. Strategy has acquired Bitcoin using equity issuance, debt and the creation of STRC as part of its balance-sheet strategy.
Critics warned the structure could amplify market moves. Ripple CEO Brad Garlinghouse warned, “Financial engineering does not drive long term value.” Investor Peter Schiff cautioned that selling large Bitcoin holdings could depress Bitcoin prices and said Strategy could not sell Bitcoin without affecting the market.
Other market participants defended the framework or downplayed immediate insolvency risk. Taran Dhillon, head of digital assets at Kula, said Bitcoin volatility alone is unlikely to break a structure like Strategy’s and pointed to access to capital as the more relevant test. A Bitfire Research note shared with analysts wrote that recent price movements reflect sentiment and liquidity conditions more than a change in the company’s solvency and concluded Strategy faces no near-term insolvency risk.
A separate stress test by Bitcoin advocate Adam Livingston modeled a three-year scenario with a 55% Bitcoin drawdown and closed capital markets. The simulation assumed no new purchases or equity issuance and about 115,727 BTC sold over three years to meet obligations; the model projected the company surviving the period and ending with a larger Bitcoin position once markets stabilized.
The filing provides specific tools and thresholds but does not remove the company’s reliance on external funding to support further Bitcoin accumulation or dividend commitments. The immediate question for investors is whether funding markets remain available if volatility increases or liquidity tightens.
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