Shares of Strategy Inc. rose 14% at one point on Monday to about $94, the biggest single-day gain in weeks, after the Bitcoin treasury firm announced a sweeping capital review.
The move marks a major shift for the company, which was once synonymous with a relentless Bitcoin accumulation strategy. Strategy’s board of directors has approved a new digital credit capital framework that will authorize the sale of up to $1.25 billion in Bitcoin to fund the newly created US dollar reserve, cover preferred dividend debt, and repay debt.
The company also authorized $1 billion in common stock repurchases and $1 billion in preferred securities repurchases.
The company raised the dividend rate on its floating rate Series A Perpetual Stretch Preferred Stock, known as STRC, to 12% per year, a 50 basis point increase effective July 1.
As of June 28, Strategy held 847,363 BTC, purchased for a total of $64.1 billion at an average price of $75,651 per coin. With Bitcoin trading at nearly $60,000 on Monday afternoon, the company is taking unrealized losses across its stack, making the new monetization framework more than just financial engineering.
The company said it holds approximately $2.55 billion in U.S. dollar reserves, which cover approximately 17 months of annual preferred dividend and interest debt of approximately $1.76 billion.
The stock price has been steadily declining since hitting a high of nearly $200 in May earlier this year, due to a weak Bitcoin and increasing risk-off pressure. Monday’s rally was largely due to the capital plan announcement, with the stock soaring above $92 during the day and peaking at around $94.
Other cryptocurrencies and Bitcoin-related stocks also started the week solidly.
Nakamoto (NAKA) stock soared more than 10% at one point during Monday trading, making it one of the day’s most powerful stocks on the crypto stock market. Strive (ASST) rose more than 3.5% to its intraday high. Coinbase (COIN), by contrast, had a quieter trade, with its stock up about 2% at its all-time high.
Strategy and Bitcoin Price Action
Bitcoin prices have fallen about 6% over the past week, falling from a high of around $64,400 earlier in the period and hovering around a low of $58,800 today. This is a significant decline that tracks with weakness across broader risk assets.
Bitcoin prices are currently down more than 18% for the month, with the June candlestick opening near $76,690 and failing to find a sustained bid on the way down.
Six consecutive weeks of ETF outflows, with institutional selling totaling tens of millions of dollars, weighed on prices throughout the period. Bitcoin remains below its key 50-month exponential moving average near $65,600, a level that technologists are eyeing as the dividing line between a short-term recovery and deeper correction territory.
Bitcoin Magazine is published by BTC Inc., a subsidiary of nakamoto Inc. (NASDAQ: NAKA).
