Strategy Inc. Creates $1.44B Reserve, Holds 650,000 BTC Amid Market Concerns

Strategy Inc. Announces $1.44 Billion Cash Reserve

Strategy Inc., formerly MicroStrategy, has created a $1.44 billion reserve to cover near-term financial obligations amid Bitcoin price volatility.
The reserve is funded by selling Class A common stock and aims to support dividends on preferred shares and interest payments for at least 12 months, potentially extending to 24 months.
The company maintains its Bitcoin holdings, currently totaling about 650,000 BTC, valued in the tens of billions of dollars.
Recent share sales included a small purchase of approximately 130 BTC for $11.7 million.

Market Reaction and Risks

Strategy’s shares have declined sharply, with analysts viewing the cash reserve as a temporary reassurance amid broader funding and debt concerns.
The company faces convertible debt of about $8 billion, with the market-to-Bitcoin ratio nearing levels where coin sales might be considered.
Peter Schiff criticized the move, labeling Strategy’s model as failed and accusing CEO Michael Saylor of misconduct.
Strategy adjusted its 2025 profit and Bitcoin yield targets due to recent market shifts, signaling a cautious outlook.
The cash reserve aims to avoid forced Bitcoin sales for fixed payouts, though it raises governance questions among investors.

Investor Concerns

Schiff's criticisms highlight governance and capital strategy concerns, though some dismiss his comments as politically charged.
Future actions regarding debt management and potential Bitcoin sales will influence investor confidence in Strategy’s leadership.