- Strategy said it may sell up to US$1.25 billion of Bitcoin to replenish cash reserves, reversing its years-long strategy of buying and never selling.
- The company also launched two US$1 billion buyback programs for its common and preferred shares, while its stock has fallen nearly 80% over the past year.
- The shift follows its market premium over its Bitcoin holdings falling below parity, signalling the self-reinforcing funding model that drove its accumulation may be breaking down.
Strategy said in a filing it may sell up to US$1.25 billion (AU$1.81 billion) of its Bitcoin to rebuild cash reserves, a sharp reversal of the never-sell playbook that turned Michael Saylor’s firm into the largest corporate holder of the asset.
The board approved what the company called a Bitcoin Monetization Program, authorising the sale to build or replenish its US dollar reserve, alongside two US$1 billion (AU$1.45 billion) programs to buy back common and preferred shares.
Strategy’s cash reserve now stands at about US$2.55 billion (AU$3.7 billion), and the board set a new policy requiring it to hold at least 12 months of preferred-dividend and interest payments in cash.
The pivot follows a critical shift in the metric underpinning Strategy’s model. Its mNAV, the ratio of enterprise value to the worth of its Bitcoin, fell below 1 on Friday, meaning the market now values the company at less than the Bitcoin it holds. That premium had long let Strategy issue stock above the value of its coins and recycle the proceeds into more Bitcoin.
Related: SBI to Buy Bitbank in US$289M Deal to Create Japan’s Largest Crypto Exchange
The Premium Disappears
With the premium gone, the flywheel can run in reverse. “Both the common and preferred shareholders, they are effectively saying we are going to sell Bitcoin to support shareholders,” said Bohan Jiang of FalconX.
Strategy holds Bitcoin worth roughly US$51 billion (AU$73.95 billion), but its shares have fallen nearly 80% over the past year, and it recently raised the dividend on its STRC preferred shares to 12%. Saylor said the firm would stay disciplined in issuing new MSTR stock, particularly when shares trade at or near 1x mNAV.
Common shares rose about 5% in pre-market trading after the announcement.
Related: Bitcoin Falls Below $60K as Tech Selloff Deepens Crypto Bear Market
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