Michael Saylor's 'Strategy' has announced a significant financial move, establishing a $1.44 billion USD Reserve and increasing its Bitcoin holdings to 650,000 BTC. This new USD Reserve is intended to support dividend payments on preferred stock and interest on outstanding debt, with the company aiming to cover at least 12 months of these obligations, eventually extending to 24 months or more. The reserve was funded through proceeds from at-the-market stock sales.
The company's total Bitcoin holdings now stand at 650,000 BTC, acquired for approximately $48.38 billion, with an average purchase price of $74,436 per bitcoin. This expansion comes at a time when there are concerns about Strategy potentially being forced to sell some of its Bitcoin if the cryptocurrency market experiences further downturns. Michael Saylor described the establishment of the USD Reserve as a crucial step in the company's evolution, aiming to better navigate short-term market volatility while pursuing its vision of being a leading issuer of Digital Credit. However, the move has also drawn criticism, with some, like Peter Schiff, viewing it as a sign of a faltering business model.
