MicroStrategy pile up $1.44 Billion cash reserve as they reach 650,000 BTC

Strategy (formerly MicroStrategy) said Monday it has set up a $1.44 billion US dollar reserve to support dividend payments on its preferred stock and interest on its debt. The reserve is funded through proceeds from recent sales of Class A common shares under the company’s at-the-market offering program.

The company said it plans to keep enough cash to cover at least 12 months of dividends, with a long-term goal of maintaining 24 months or more. Strategy said the reserve equals 2.2% of its enterprise value, 2.8% of its equity value and 2.4% of the value of its Bitcoin holdings.

The move comes alongside another Bitcoin purchase. Strategy bought 130 BTC for $11.7 million in the past two weeks. The purchase raises its holdings to 650,000 BTC, acquired for $48.38 billion. The company said its preferred shares now yield between 9% and nearly 13%, compared with rates near 6% on preferred stock issued by large US banks.

Strategy said the new reserve will be the primary source of dividend funding for preferred shareholders, debt holders and common equity investors. It added that raising $1.44 billion in less than nine trading days improved the appeal of its capital structure.

Founder Michael Saylor said the cash reserve will complement the firm’s Bitcoin reserve and help it manage short-term market swings. Chief executive Phong Le said the latest crypto purchase brings the company’s holdings to about 3.1% of the total Bitcoin supply that will ever exist. He said the reserve currently covers 21 months of dividend payments.

Alongside the reserve and asset disclosures, Strategy lowered its performance targets for 2025. The company now expects its Bitcoin yield to finish the year between 22% and 26%. It projects a Bitcoin price range of $85,000 to $110,000 at year-end.

Strategy also cut its expected Bitcoin gains. The earlier target of $20 billion has been reduced to between $8.4 billion and $12.8 billion. The forecast for operating income has been lowered to a range of $7 billion to $9.5 billion, down from an initial projection of $34 billion.