Strategy may sell up to $1.25 billion in Bitcoin to calm investor jitters | Fortune
Strategy is shifting strategies as the Bitcoin behemoth seeks to quell fears over its financial health. On Monday, the company announced that it may sell up to $1.25 billion in Bitcoin to build its cash reserves, cover investor payouts, and fund stock buybacks to avoid issuing more equity.
The new policy is an about-face for Strategy, which has established itself as one of the biggest buyers of the world’s largest cryptocurrency. Michael Saylor, the firm’s executive chairman and a prominent Bitcoin bull, has repeatedly proclaimed that investors should never sell their holdings. “You do not sell your Bitcoin,” he said last October.
But Strategy’s stock has recently come under heavy pressure, shedding 44% over the past year. Meanwhile, STRC, a preferred share issued by Strategy that Saylor has said has “money-market-level stability,” has also tanked. Supposedly pegged to $100, STRC closed Friday at around $74.
Now, Saylor has begun to change his tune. In June, the company sold $2.5 million of Bitcoin. In addition to its plan to sell up to $1.25 billion in Bitcoin, the company calls for changes to cash reserves, adjustments to the dividend policy, and up to $1 billion in authorized buybacks of its preferred share products.
“Strategy remains committed to Bitcoin as its primary treasury reserve asset,” Saylor said in a statement.
On Monday morning, the company’s shares rose almost 3% to trade near $86, while STRC gained about 4% to approach $79. Bitcoin also briefly climbed to around $60,600 before pulling back.
Saylor cofounded Strategy, then known as MicroStrategy, in 1989. It operated as an enterprise software firm but, concerned about U.S. dollar devaluation, the company adopted Bitcoin as its primary treasury reserve asset in 2020, starting with a $250 million purchase. Strategy now owns about 4% of the total supply of Bitcoin.
Over the past year, a swarm of Strategy imitators loaded public companies with cryptocurrencies to try to spark stock rallies, but that trade has since fallen out of favor. Solana‑hoarder Solmate has lost almost all its value, leaving backers nursing heavy paper losses, while Cantor Fitzgerald’s BSTR Bitcoin vehicle has scrambled to keep a SPAC deal alive amid waning investor appetite.