Strategy’s STRC rebounds 30% as company builds cash reserve, bitcoin price stabilizes
Strategy (STRC) has seen its stock price rebound by 30% following a period of bitcoin price stabilization and strategic asset management. The company sold a portion of its bitcoin holdings to fund dividends and increased its U.S. dollar cash reserves to $4 billion.
Why it matters
The company's ability to balance bitcoin holdings with dividend obligations serves as a case study for institutional crypto-asset management.
STRC bottomed in late June around $71 as bitcoin fell below $60,000. Since then, Strategy has sold 5,226 BTC for $321 million across three separate transactions, reducing its bitcoin holdings from 847,363 BTC to approximately 842,137 BTC. The sales were intended, in part, to demonstrate that the company can use bitcoin to meet its dividend obligations, rather than treating it as an idle asset.
Strategy has also repurchased $106 million of STRC as it seeks to return the preferred stock to its $100 stated value.
In addition, the company increased its U.S. dollar reserve by another $250 million on Monday, bringing the total to $4 billion. This provides approximately 2.3 years of coverage for dividend obligations on its preferred securities. Meanwhile, Strategy maintained STRC’s annualized dividend rate at 12%.
As for bitcoin, the price has at least stopped falling, stabilizing above $60,000 for several weeks in a row.
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