Strategy sets $1.4B cash reserve to avoid selling Bitcoin holdings

The Tysons Corner, Virginia–based company said proceeds from recent sales of Class A common stock seeded the reserve, which currently covers at least 21 months of expected dividend outlays. Management’s goal is to keep the buffer at up to two years over time. The step follows days of scrutiny around Strategy’s mNAV — a valuation measure that compares enterprise value with the market value of the firm’s Bitcoin — which hovered near 1.2 on Monday and, if it turned negative, could have pressured the company to monetize coins.

Chief Executive Phong Le acknowledged in a Friday podcast that selling Bitcoin would be a last resort if mNAV dipped below 1.0 and cash were needed to fund shareholder payouts. “We can sell Bitcoin and we would sell Bitcoin if we needed to fund our dividend payments below 1x mNAV,” he said, adding that “the mathematical side wins,” even if “we don’t really want to be the company that’s selling Bitcoin.”

Shares fell more than 5% in pre‑market trading Monday before trimming losses after the reserve was announced. Bitcoin was down about 6% around the same time. Strategy — formerly MicroStrategy — has shifted from a pure software focus to an operating model centered on holding and financing roughly $56 billion of Bitcoin. To build that position, it has leaned on equity and preferred issuance as its software unit does not generate enough free cash flow to fully cover dividends and interest. Bitcoin itself pays no yield.

After a brief pause in purchases, Strategy said it bought 130 BTC last week for about $11.7 million, funded with common‑stock proceeds.

Alongside the reserve, the company updated full‑year guidance first issued in October, which assumed a year‑end Bitcoin price of $150,000. It now models $85,000–$110,000, implying operating income anywhere from a $7 billion loss to a $9.5 billion profit under fair‑value accounting for Bitcoin. Strategy guided to net income between a $5.5 billion loss and a $6.3 billion profit, and to diluted EPS ranging from −$17 to +$19 per share.

As GNcrypto wrote previously, on Nov. 28, 2025 Fundstrat’s Tom Lee reaffirmed a year‑end Bitcoin target of $100,000, citing potential Federal Reserve rate cuts and stronger institutional demand. Strategy’s shares rose on the call, with technicians flagging oversold readings (RSI near 23) and an initial resistance area around $230 as Bitcoin remained below prior highs.

In a follow‑up, we noted index‑eligibility risks if Bitcoin weakness persisted: JPMorgan estimated ~$2.8B of selling if MSCI drops the stock, and up to ~$8.8B if other providers follow; about $9B of Strategy’s ~$59B market value sits with index trackers. Michael Saylor defended the strategy, pointing to a $42.33M software business and more than $25B in Bitcoin‑backed notes outstanding while MSCI reviews classification.