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$MSTR - STRATEGY LAUNCHES $1.25B BTC PLAN
Strategy unveiled a new capital framework, including a $1 billion repurchase program for digital credit securities.
The board also approved a Bitcoin monetization program to generate up to $1.25 billion for its USD reserve, which stood at $2.55 billion as of June 28.
Are people selling Bitcoin to buy SpaceX, OpenAI, & Anthropic?
Coinbase CEO Brian Armstrong:
"Part of the reason why Bitcoin is down might be because people are trying to get as much of their risk capital into SpaceX, OpenAI, & Anthropic right now."
"I'm still super bullish on Bitcoin."
@brian_armstrong @elonmusk
The expected official public announcement from Strategy has arrived.
🟣No BTC purchases.
🟣The total BTC amount remains unchanged at 847.363 BTC. So no BTC sales are seen this week.
🟣In contrast, Strategy sold 12,669,017 new MSTR shares through its ATM program, raising a net cash of $1.152 billion.
🟣The USD reserve also increased from roughly $1.4 billion to $2.55 billion. The increase comes almost entirely from this new MSTR share issuance.
(⚡️ In short; they did not sell BTC. They issued and sold MSTR shares to raise $1.15 billion.)
🟣They raised STRC’s annual dividend rate to 12%.
🟣The USD reserve will now be used, by management decision, only for preferred dividends and debt interest; the minimum target is to cover at least 12 months of these obligations.
🟣The current $2.55 billion reserve, according to the company, covers about 17.4 months of dividend/interest liabilities.
🟣They authorized $1 billion to buy back STRC and other preferred products, and an additional $1 billion to repurchase MSTR shares.
⚠️The most critical change: The board received authority to, if needed, sell BTC to increase the USD reserve, make dividend/interest payments, or conduct STRC/MSTR buybacks. The first capacity that can be used from this channel for the USD reserve is $1.25 billion.
(⚡️ In other words; they have not sold BTC for now, but have made BTC sales an official capital management tool. The pressure they faced in recent weeks evidently set off red alarms at the company, leading them to take it seriously and become fearful.)
🟣Another critical negative aspect is the dilution for MSTR investors. Approximately 12.67 million new shares were issued in a single week.
The official public announcement (SEC filing) from Strategy (Michael Saylor) will be released today.
We will see whether they sold BTC last week or issued and sold MSTR shares. As you know, $STRC and $MSTR suffered a serious dump last week, and the market's general view is that Michael Saylor either sold BTC or issued and sold new MSTR shares. That was my expectation as well; we discussed it while the dump was happening last week.
But Michael Saylor claimed the opposite in a tweet yesterday. He posted “We're gonna need more charts” (We need more charts) implying “we are buying new BTC”.
We will see the outcome once the official public announcement is released this evening.
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