Strategy raises US$467 million, cash reserves increase to US$3 billion but suspends increasing Bitcoin holdings
Strategy, the world's largest corporate Bitcoin holder, raised about $467 million through a common stock offering, pushing cash reserves to $3 billion, but did not buy any Bitcoin for the third consecutive week. According to the company’s latest disclosure documents, Strategy did not conduct any Bitcoin transactions in the seven days ended July 12, but instead replenished its cash buffer by issuing 4.8 million MSTR shares. Previously, the company had just completed two Bitcoin sales in early July, cashing out a total of approximately US$216 million. At that time, the Bitcoin holdings dropped to 843,775 coins. This is Strategy’s longest buying pause since it adopted Bitcoin as its primary reserve asset in 2020. The fundraising follows a major adjustment in the company’s financing strategy. On June 29, Strategy launched the “Digital Credit Capital Framework”, marking a shift from one-way holdings to active capital management. The new framework breaks the "buy only, not sell" principle for the first time and authorizes the sale of up to $1.25 billion in Bitcoin when necessary to pay preferred stock dividends, debt interest and securities repurchases. At the same time, a common stock and preferred stock repurchase plan totaling US$2 billion was established. Analysts believe that this round of adjustments is directly related to the cash flow pressure faced by the company. Strategy currently holds 843,775 Bitcoins, with an average purchase cost of approximately US$75,476. Based on the current price of approximately US$63,000, the book floating loss exceeds US$10 billion. The company needs to pay approximately US$1.76 billion in preferred stock dividends and debt interest annually, and its cash reserves of approximately US$3 billion can cover approximately 20 months of related expenses. CEO Phong Le said the new strategy will flexibly switch based on market conditions, issuing securities when capital is favorable and repurchasing them when the price of the instrument has repurchase value. Citi analysts maintained a "buy" rating but lowered the target price from $325 to $260, believing that the new capital plan buys the company more time.