Strategy creates US$1.44 billion 'cash reserve'…lowers year-end BTC assumptions

Minseung Kang

Summary

Strategy said it established a US$1.44 billion cash reserve to secure short-term financial stability.
It said it will create a dollar-based buffer separate from the Bitcoin reserve to respond to short-term market volatility.
It said it also lowered its year-end Bitcoin assumption and performance outlook following Bitcoin price adjustments.

Strategy (formerly MicroStrategy), which holds Bitcoin (BTC) as its primary asset, has set up a US$1.44 billion dollar reserve to secure short-term financial stability. Considering increased Bitcoin price volatility, it also adjusted its year-end performance guidance and Bitcoin-related metrics.

On the 1st (local time), Strategy said, "We established a dollar (USD) reserve to stably secure the capacity to pay preferred stock dividends and debt interest," adding, "We plan to maintain a level sufficient to cover at least 12 months' worth of dividends going forward." The reserve was raised through recent sales of common stock.

Michael Saylor, founder and chairman of Strategy, said, "This is a step to create a cash-based buffer separate from the Bitcoin reserve," calling it "a measure to respond to short-term market volatility."

As Bitcoin's price correction continued, the company lowered its year-end Bitcoin assumption from $150,000 to a range of $85,000–$110,000. Accordingly, forecasts for operating income, net income, and earnings per share (EPS) were adjusted by the same magnitude.

BTC