Strategy (NASDAQ: MSTR), the Bitcoin treasury company led by Executive Chairman Michael Saylor, announced the creation of a $1.44 billion U.S. dollar reserve specifically designed to fund at least 12 months of dividends on its preferred stock and interest payments on outstanding debt.
This move comes amid Bitcoin’s price dipping below $90,000 and Strategy’s stock experiencing a pre-market decline of over 4%, reflecting broader market volatility.
The reserve was financed entirely through proceeds from Strategy’s at-the-market (ATM) offering program, involving the sale of Class A common stock. This approach allows the company to raise capital without immediate dilution pressure from fixed offerings.
While the initial $1.44 billion covers approximately 21 months of obligations based on current dividend rates, Strategy’s stated intention is to maintain at least 12 months’ worth at all times. The company plans to bolster the reserve progressively, targeting coverage for 24 months or more to provide a stronger buffer against crypto market fluctuations.
As quoted by President and CEO Phong Le, “We intend to use this reserve to pay our Dividends and grow it over time.”
This reserve represents about 2.2% of Strategy’s enterprise value and aims to insulate dividend payouts from short-term Bitcoin price swings, reinforcing investor confidence in the company’s role as the world’s largest public Bitcoin holder now at 650,000 BTC, or ~3.1% of total supply.
Updated FY 2025 GuidanceIn tandem with the reserve announcement, Strategy revised its fiscal year 2025 Bitcoin-related key performance indicators (KPIs), assuming continued capital raises for BTC acquisitions and the maintenance of the USD reserve.
Bitcoin Yield: 22.0%–26.0% down from prior estimates, reflecting adjusted assumptions. Bitcoin Dollar Gain: $8.4 billion to $12.8 billion. These updates underscore Strategy’s ongoing commitment to Bitcoin accumulation while prioritizing financial stability for stakeholders.
The announcement addresses growing concerns from investors and critics about Strategy’s ability to service high-yield preferred stock dividends recently increased from 10.50% to 10.75% annually for its STRC stock without relying solely on volatile BTC sales.
By parking funds in USD, Strategy signals a more conservative risk management strategy, potentially stabilizing its balance sheet as its modified net asset value (mNAV) trades at parity with underlying Bitcoin holdings.
However, some observers view this as a sign of caution, with one analyst noting it as “the beginning of the end” for aggressive growth tactics. This positions Strategy to weather potential downturns while continuing its Bitcoin “HODL” ethos, with the reserve acting as a liquidity moat for its dividend-focused investors.
As of today, MSTR trades at a premium to its net asset value (NAV) tied to BTC holdings, but recent crypto market weakness has pressured the stock. Current price is $171.42 down 3.3% from previous close of $177.18.
Today’s trading opened at $168.25, hit a low of $155.61 near 52-week low, and ranged up to $172.18. Volume spiked to 42.36 million shares—over 3x the average of 14.02 million—indicating heightened selling pressure amid a broader crypto sell-off.
The stock has fallen ~60% from its July 2025 peak, mirroring Bitcoin’s correction from $110,000+ to sub-$90,000. Yesterday, MSTR dropped 11.2% as BTC extended losses, but it rebounded 5.8% intraday earlier today on news of asset manager Tidal Investments increasing exposure—though sellers regained control by close.
$4.1 billion in convertible notes; the new USD reserve covers ~21 months of dividends/interest, providing a buffer against BTC volatility. MSTR’s enterprise value is ~$53 billion, with BTC holdings comprising ~110% of market cap—trading at a slight discount to NAV recently, a rare occurrence that some view as a buying opportunity.
The big catalyst this week was MicroStrategy’s December 1 announcement of a $1.44 billion USD reserve, funded via at-the-market (ATM) stock sales, to secure 12+ months of preferred stock dividends and debt interest.
This conservative move—representing ~2.2% of enterprise value—aims to decouple payouts from BTC price swings and signals caution amid the “crypto winter” fears. However, it drew criticism: Gold bug Peter Schiff called the BTC treasury model a “fraud” and MSTR “broken,” while Jim Cramer blamed it for contributing to market jitters.
Updated FY 2025 guidance reflects tempered BTC yield expectations 22–26%, down from prior highs but still projects $8.4–$12.8 billion in BTC dollar gains, assuming continued capital raises. Whale activity shows bearish bets, like a large put transfer expiring Dec 5, but some institutions are adding positions.
Traders eye oversold bounces, calls targeting $280 from $155 support, but spam and unrelated hype dominate recent chatter. Broader crypto routs, including Shopify’s Cyber Monday outage indirectly tied to BTC exposure, add noise.
MSTR is deeply oversold on weekly RSI (25), with price testing the $125–$160 demand zone that held in 2024. Key resistance at $185 multi-month rejection level; a break above could target $200–$280 if BTC stabilizes above $90,000.
Support at $155—a breach risks $125. The stock’s 200-day SMA ($220) looms as a reclaim target on any BTC rebound. High volume today suggests capitulation, potentially setting up a short-term bottom. Consensus is bullish despite the pullback.
Average 12-Month Target: $469.43 up 174% from current, with highs at $650 BTC to $150K scenario. Continued BTC HODL strategy + ATM raises could drive mNAV premium to 2x if crypto rallies; seen as a leveraged BTC play without direct exposure.
Over-reliance on BTC software biz shrinking; dilution from stock sales; regulatory risks in crypto. Predicted fair open for Dec 3 was ~$182, but reality undershot due to BTC weakness. 90%+ of value tied to BTC; further drops to $80K could push MSTR to $140.
Ongoing ATM offerings raised $1.44B recently erode per-share BTC holdings. Premium to NAV could compress to discount in prolonged bear market. Fed signals on QE starting Dec 3 add volatility; yen carry trade unwind hurts risk assets.
Neutral short-term hold for bounce, bullish long-term for BTC believers. The reserve bolsters stability, positioning MSTR as a “liquidity moat” for dividend investors. If BTC holds $90K and Fed eases, expect 20–30% upside to $210 by year-end.
Monitor BTC for directional cues—any green shoots could ignite a sharp recovery.
