Strategy Inc. Unveils Sweeping Capital Overhaul Amid Bitcoin Woes

Strategy Inc., a bitcoin treasury company, saw its shares surge over 12% on Monday to roughly $94, marking its best single-day gain in weeks. The jump comes after the company unveiled a sweeping capital overhaul that includes selling up to $1.25 billion in bitcoin to fund a newly created U.S. dollar reserve and cover preferred dividend obligations.

The new Digital Credit Capital Framework also authorizes $1 billion in common stock buybacks and $1 billion in repurchases of its preferred securities, while increasing the dividend rate on its Variable Rate Series A Perpetual Stretch Preferred Stock to 12% annually.

Strategy held 847,363 BTC as of June 28, purchased for an aggregate $64.10 billion at an average price of $75,651 per coin. With bitcoin trading near $60,000 on Monday afternoon, the company sits on an unrealized loss on its entire stack, a context that makes the new monetization framework more than just financial engineering.