The new capital management program from Strategy, introduced at the end of June, was an important step toward reducing liquidity risks. However, in my assessment, the company still leaves two fundamental questions unanswered, without which its strategic pivot remains incomplete.
Let me remind you that the plan included five key elements: creating a dollar reserve exclusively for payments on preferred shares and debts, increasing the STRC dividend to 12% per annum, a buyback of preferred and common shares worth up to $1 billion each, and a bitcoin monetization program of up to $1.25 billion. I especially note the mechanism of disciplined share issuance when trading near 1x mNAV.
From June 29 to July 5, Strategy sold approximately 3,588 BTC for about $216 million and raised $466.7 million through the placement of MSTR shares. As a result, the dollar reserve grew from $1.44 billion to $3 billion, and dividend coverage doubled from 14 to 29 months. The bitcoin reserve remained at 843,775 BTC. However, share buybacks have not yet been conducted.
The dynamics of STRC inspire cautious optimism: the securities rebounded from lows of around $75 to $85, but are still significantly below the par value of $100.
Two Gaps in the Defense
Despite clear progress, two critical gaps remain. The first is the absence of a systematic model for determining when to resume bitcoin purchases. The share issuance rule at 1x mNAV regulates capital raising, but not its deployment. Without a clear algorithm, the company risks once again "buying at local peaks."
The second gap is the lack of a disciplined approach to sales in the next bull cycle. The current monetization program is purely defensive and does not provide for partial profit-taking or hedging at market peaks. And this, in my view, is the second half of sound active capital management.
My comment: Strategy has taken the right step, but it is not enough. Without implementing a systematic approach to both buying and selling bitcoin, the company remains vulnerable to volatility. The market expects not just a tactical maneuver, but a full-fledged strategy that allows capitalizing on cycles, rather than simply weathering them.