Strategy Unveils Capital Overhaul With $1 Billion Buybacks, 12% STRC Dividend

Strategy has unveiled a capital overhaul aimed at easing investor concerns about its financial health. The move comes as Bitcoin trades below $60,000 and the company’s stock remains down more than 70% from its peak.

Cointelegraph reported on July 30 that Strategy detailed the plan in an 8-K filing submitted to the U.S. Securities and Exchange Commission on July 29. The plan includes up to $1 billion in MSTR share repurchases, up to $1 billion in buybacks of STRC and related securities, an increase in STRC’s annual dividend rate to 12%, and an expansion of cash reserves to $2.55 billion. The filing also includes a provision allowing the company to sell as much as $1.25 billion of Bitcoin if needed to meet dividend payments or debt obligations.

The market reacted immediately. MSTR and STRC each climbed more than 12% in after-hours trading after the filing was released. STRC was trading at $84.86, sharply higher than $72.06 on July 26.

The main issue is the stability of the STRC structure. STRC is a perpetual preferred stock tied to Strategy’s Bitcoin treasury strategy and is designed to pay a 12% annual dividend based on a $100 par value. Some investors have warned that falling Bitcoin prices and worsening funding conditions could turn the structure into a so-called death spiral that amplifies losses. Capriole Investments founder Charles Edwards wrote on X on July 26, “Doesn’t this give you 2022 LUNA flashbacks at MicroStrategy?”

Ripple Chief Executive Officer Brad Garlinghouse told CNBC that financial engineering does not create long-term value. Capital.com senior analyst Kyle Rodda told Cointelegraph that Strategy’s business model amplifies momentum in both rising and falling markets. Higher funding costs and weaker investment demand could deepen downside pressure when markets soften.

Others disagree. Taran Dillon, head of digital assets at Kula, told Cointelegraph that Bitcoin volatility alone is unlikely to break a structure like Strategy’s. The real test, Dillon said, would come if Bitcoin stays weak while capital-raising conditions gradually deteriorate. In a report shared with Cointelegraph, Bitfire Research said Strategy faces no near-term insolvency risk and that STRC’s price dislocation reflects market sentiment and liquidity conditions rather than a structural flaw.

Dillon said the overhaul meaningfully improves transparency around how Strategy would respond in a crisis, but added that continued access to capital markets will remain the key variable.