Strategy Establishes $1.44 Billion USD Reserve Dedicated to Preferred Dividends and Debt Service

2025-12-02 06:21:17

Strategy Inc. (NASDAQ: MSTR) announced that the creation of a $1.44 billion USD cash reserve exclusively earmarked for paying dividends on its outstanding preferred shares and servicing interest on existing debt obligations. The funds were generated through the sale of Class A common stock under the company’s at-the-market (ATM) equity offering program.

Key Details of the Reserve

Initial Size: $1.44 billion
Purpose: Cover preferred stock dividends and debt interest payments
Coverage Target: Minimum 12 months of obligations, with a long-term goal of building a buffer sufficient for 24+ months
Management: Fully discretionary — Strategy retains complete control over the reserve’s existence, terms, and size, with adjustments based on market conditions, liquidity needs, and other factors

The establishment of this dedicated reserve adds another layer of financial flexibility to Strategy’s Bitcoin-centric treasury strategy, which currently holds 649,870 BTC valued at approximately $59 billion at recent prices.

Strategic Rationale

By ring-fencing USD liquidity specifically for fixed obligations, Strategy aims to:

Reduce reliance on future equity or debt issuances during periods of market stress
Provide greater visibility and confidence to preferred shareholders and creditors
Maintain operational runway even in prolonged Bitcoin bear markets

CEO Phong Le emphasized that the reserve is not a shift away from the company’s core Bitcoin accumulation strategy but rather a prudent risk-management enhancement.

Market Reaction

MSTR shares traded modestly higher in pre-market following the announcement, with investors viewing the reserve as a de-risking measure that strengthens the balance sheet without diluting the Bitcoin-per-share growth narrative.

In summary, Strategy’s new $1.44 billion USD reserve — built from recent equity raises and dedicated solely to preferred dividends and debt service — represents a significant enhancement to the company’s financial resilience, targeting 12–24 months of coverage while preserving its aggressive Bitcoin treasury strategy.

BTC0.38%

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.