Strategy's new capital management program certainly represents a significant step forward in reducing liquidity risks. However, as my calculations and blockchain data analysis show, this step is only half the journey. The fundamental problem—the lack of clear, systematic discipline in both buying and selling bitcoin—remains unresolved.

Let me remind you that at the end of June, Strategy presented a five-stage plan that included creating a dollar reserve exclusively for payments on preferred shares, increasing dividends on STRC to 12% per annum, share buyback programs worth up to $2 billion, and, most importantly, a bitcoin monetization program worth $1.25 billion.

My analysis shows that the company responded promptly to the warnings. From June 29 to July 5, Strategy sold approximately 3,588 BTC for about $216 million, and then raised another $466.7 million through the sale of MSTR common shares. As a result, the dollar reserve grew from $1.44 billion to $3 billion, and dividend coverage doubled—from 14 to approximately 29 months. The bitcoin reserve remained at 843,775 BTC.

However, as I have repeatedly noted in my reports, tactical reaction does not replace strategic planning. At this point, Strategy lacks two critically important elements:

  1. A systematic model for resuming bitcoin purchases. The equity issuance rule at an mNAV of around 1x regulates capital raising but not its deployment. Without a model that accounts for market valuations, the company risks buying at local peaks again, as it has done before.
  2. A disciplined approach to selling in a rising market. The current monetization program is purely defensive in nature. It does not provide for partial profit-taking or hedging at cycle peaks. In my understanding, active capital management requires a symmetrical approach: buying discipline must be balanced by selling discipline.

Interestingly, despite the positive steps, STRC preferred shares are still trading below their $100 par value, although they have recovered from lows of around $75 to $85. This suggests that the market is not yet fully confident in the long-term sustainability of the new strategy.

My assessment: Strategy has taken the right, albeit belated, step by strengthening liquidity. However, until clear, algorithmic rules are implemented for both sides of bitcoin trading, the company will remain vulnerable to market cycles. This is not a turnaround, but merely its beginning.