Strategy Adopts Digital Credit Capital Framework

Strategy’s board approved a Digital Credit Capital Framework that allows up to $1.25 billion of Bitcoin monetization, authorizes $2 billion in share buybacks and raises the dividend on STRC preferred stock to 12% starting in July. The company also set a policy to hold at least 12 months of dividend and interest coverage in cash, increasing the cash buffer to about $2.55 billion, roughly 17 months of coverage at current levels.

The framework replaces the firm’s prior capital approach and formally permits selling Bitcoin to build cash, fund dividends and cover interest obligations. It establishes a $1.25 billion program to monetize BTC and a $2 billion buyback authorization split evenly between common and preferred shares, to be deployed during market dislocations without tapping the cash reserve.

Under the new policy, the company will stop issuing common equity to buy Bitcoin when its shares trade near the value of the firm’s Bitcoin holdings. Management framed the change as a shift from primarily issuing capital to active management of the capital structure through both issuance and repurchases as market conditions warrant. The company characterized Bitcoin as its primary reserve asset and stated the framework is intended to strengthen its credit profile.

The announcement prompted an immediate market response: the company’s common stock rose about 13%, its largest one-day gain in four months, while STRC preferred shares climbed roughly 12%. Bitcoin briefly rose above $60,000 before retreating. Company filings indicate the larger cash cushion will provide additional flexibility into July.

CEO Phong Le described the change as moving to ‘actively managing the capital structure through both issuance and repurchases.’ Founder Michael Saylor characterized the framework as strengthening the company’s credit profile while maintaining Bitcoin as its primary reserve asset.

The framework addresses investor and analyst concerns about near-term obligations and liquidity. Some analysts had urged converting more Bitcoin to cash to cover payments and reduce leverage. Company officials noted the policies create formal authority to monetize holdings when necessary and to repurchase shares when market conditions present value.

Management said the measures will be applied flexibly over the coming months and that execution will consider market conditions alongside the need to preserve cash reserves and dividend coverage.