Strategy shares climbed after the company disclosed a major increase in its cash reserves, extending coverage for dividend and interest obligations while continuing to adjust its capital allocation strategy ahead of its upcoming quarterly earnings release.
Strategy increases cash reserve through share sale
Strategy Inc. disclosed in a Form 8-K filed on Monday that it increased its cash reserve by $525 million during the past week. The company sold 5.4 million MSTR shares, generating proceeds of $544.5 million. During the same period, it also repurchased 288,930 shares of its STRC preferred stock for $25 million.
Executive Chairman Michael Saylor confirmed the update on X, stating that Strategy has now secured 2.1 years of coverage for dividend and interest payments. According to the filing, the company now holds a total USD Reserve of $3.75 billion.
Saylor had hinted at the announcement a day earlier by posting the company’s familiar tracking chart alongside the comment, “We’re gonna need another color.” Similar posts had previously been followed by announcements of Bitcoin purchases. However, Monday’s filing instead detailed an expansion of the company’s cash reserve.
The latest disclosure also confirmed that Strategy did not purchase any Bitcoin during the reporting period. That marked the fifth consecutive week without a Bitcoin acquisition.
Bitcoin holdings remain unchanged as criticism emerges
Strategy continues to hold 843,775 BTC, valued at approximately $54 billion. Based on the reported figures, the company’s Bitcoin position currently reflects paper losses exceeding $8 billion.
Long-time Bitcoin critic Peter Schiff criticized the company’s latest financing decision. In a post on X, Schiff argued that selling MSTR shares was the wrong approach and claimed Strategy should have sold Bitcoin instead of what he described as “discounted MSTR shares.”
He wrote, “So, another week when you chose to destroy common shareholder value by selling discounted MSTR shares (thereby reducing Bitcoin per share) to raise cash and buy back STRC rather than sell Bitcoin.”
Schiff further argued that repeated sales of common shares reduce the justification for investors to own MSTR.
MSTR rises ahead of quarterly earnings report
MSTR traded at $97.46, representing a daily gain of 6.44% following the announcement. The share price advanced as investors assessed the company’s strengthened cash position and capital management activities.
MSTR price chart. Source: Yahoo Finance.
Strategy is scheduled to report its second-quarter earnings on Thursday, July 30. The company’s earnings are expected to increase by 6.40% to $121.88 million.
The consensus price target for MSTR stands at approximately $360, representing an implied upside potential of more than 290% based on current trading levels.
