Strategy Builds $1.44 Billion Reserve to Calm Investor Worry

Strategy CEO Phong Le said the company moved to create a $1.44 billion USD reserve to settle investor worry during a weak period for Bitcoin. Speaking on CNBC’s Power Lunch on Friday, Le said the firm wanted to clear talk that the company might struggle to maintain its dividend plans.

On Monday, Strategy revealed that the reserve was funded through a stock sale. The goal is to keep enough cash to cover at least 12 months of dividend payouts. The firm also plans to grow the reserve until it can support a 24 month runway.

Pushback Against Dividend Fear

The fundraising drive follows repeated claims that Strategy might not be able to manage its debts and dividend payments if the stock were to slide too far. Le said the talk had grown louder during recent market weakness.

He stated that the company did not face any real threat to its dividend plans and did not expect to sell its Bitcoin holdings. Still, he added that worry in the market had encouraged short positions linked to Bitcoin. 

In response, Strategy raised $1.44 billion in roughly eight and a half days. According to Le, this amount covers about 21 months of dividend payouts. He said the move was meant both to counter the talk and to show that the company can still raise cash even during a downward phase for Bitcoin.

Last week, Le noted that the firm would only consider selling Bitcoin if its stock price dropped below net asset value and fresh capital became unavailable. He said this was a last resort and not a current risk for the company.

New Dashboard to Show Long Term Capacity

To reinforce its message, the company unveiled a new tool called the BTC Credit dashboard. According to Strategy, the dashboard shows that the firm holds enough assets to meet dividend payouts for more than 70 years. The figure is meant to give investors a clear view of the company’s position without requiring them to interpret complex filings.

Le said the company chose to move early rather than wait for the market to calm. With the reserve now in place, Strategy aims to present itself as prepared for continued volatility in Bitcoin and ready to meet its near term commitments without selling its holdings.