Strategy Inc. has announced the establishment of a substantial U.S. dollar reserve amounting to $1.44 billion, which aims to support dividend payments on its preferred stock as well as interest on its existing debt. This reserve was funded through sales of class A common stock as part of its at-the-market offering program. The company’s strategy is to maintain the USD Reserve for at least twelve months of dividends, and they aspire to increase this amount to cover up to two years of dividends in the future. The management retains the discretion to adjust this reserve based on market fluidity and liquidity requirements.
Michael Saylor, the Founder and Executive Chairman of Strategy, expressed that the creation of this USD Reserve complements the company’s existing Bitcoin Reserve, effectively positioning Strategy to better navigate short-term market fluctuations while striving to solidify its leadership in the digital credit space. Currently, Strategy holds 650,000 Bitcoin, representing about 3.1% of the total Bitcoin supply projected to exist, which emphasizes its significant role in the Bitcoin ecosystem.
Additionally, the company has updated its fiscal year 2025 earnings guidance and Bitcoin key performance indicator (KPI) targets. The revised guidance reflects a more conservative Bitcoin price range for December 31, 2025, falling between $85,000 and $110,000, recognizing the cryptocurrency’s high volatility. Based on this assumption, the projections for the company’s operating income, net income, and diluted earnings per share span a wide range due to recent declines in Bitcoin pricing.
The updated financial predictions for the fiscal year 2025 indicate potential operating losses ranging from $7 billion to profits of $9.5 billion, and net income losses of approximately $5.5 billion to gains of $6.3 billion. Furthermore, the diluted earnings per share could range from a loss of $17.00 to a profit of $19.00 per share due to the fluctuations in Bitcoin’s market price. Notably, the company is actively pursuing capital raises to achieve its Bitcoin yield target, which they estimate to be between 22% and 26% for the fiscal year.
Initiatives to enhance their Bitcoin holdings through common stock issuances and preferred stock offerings underline their strategic approach. This commitment is enhanced by their recent adoption of a new accounting standard requiring Bitcoin to be measured at fair value, signifying a direct correlation between their financial performance and Bitcoin market prices.
Strategy Inc., a pioneer in the Bitcoin treasury space and recognized for its innovative approach in utilizing Bitcoin as a primary treasury asset, continues to position itself as a leader in both the digital asset and enterprise analytics sectors. Their goal remains focused on creating long-term value while navigating the modern financial landscape.