Reserve Creation and Purpose
Michael Saylor's Strategy announced Monday the creation of a $1.44 billion dollar reserve designed to support dividend payments and interest obligations. The reserve was established using proceeds from Class A common stock sales through the company's at-the-market offering program.
Strategy intends to maintain reserve levels sufficient for at least 12 months of dividend coverage, with plans to eventually extend that timeframe to 24 months or beyond. The company stated this approach will serve as its primary mechanism for funding payments to preferred stock holders, debt holders, and common equity investors.
The reserve represents 2.2% of Strategy's enterprise value and 2.8% of its equity value. Strategy raised the entire $1.44 billion amount in fewer than nine trading days by selling MSTR shares, according to the company update.
Bitcoin Acquisition and Holdings
Alongside the reserve announcement, Strategy disclosed buying another 130 Bitcoin for $11.7 million over the past two weeks. This brings the company's total Bitcoin position to 650,000 Bitcoin, purchased for a cumulative $48.38 billion, representing roughly 3.1% of the maximum 21 million Bitcoin supply.
Founder and CEO Commentary
Founder Michael Saylor described the dollar reserve as complementary to the company's Bitcoin holdings. He stated this financial tool better positions Strategy to handle short-term volatility in crypto markets while ensuring consistent dividend payments.
CEO Phong Le emphasized the reserve currently provides 21 months of dividend coverage. He noted this strengthens the company's commitment to credit investors and shareholders given Strategy's significant role in the broader BTC ecosystem.
Revised 2025 Financial Projections
Strategy also revised downward its 2025 performance expectations. The company now projects Bitcoin yield ending between 22% and 26% for the year, with Bitcoin prices estimated to reach $85,000 to $110,000 by year-end.
Expected Bitcoin gains were cut from $20 billion to a range of $8.4 billion to $12.8 billion. Operating income projections dropped from $34 billion to between $7 billion and $9.5 billion for 2025.
Addressing Market Skepticism and Future Strategy
During the company update call, Saylor addressed market skeptics directly. He explained Strategy possesses both the capability and willingness to sell Bitcoin for dividend funding while simultaneously growing its Bitcoin holdings each quarter indefinitely.
The company indicated it may sell Bitcoin or Bitcoin derivatives if its market-adjusted net asset value falls below 1, though the dollar reserve provides an alternative funding source for up to two years. MSTR stock fell over 8% following the announcement to trade below $163 per share.