Michael Saylor's Strategy plans to buy back stock and sell bitcoin among many moves aimed at stemming the loss of confidence in the crypto-hoarding company.

Strategy said Monday it would repurchase as much as $1 billion of its preferred shares and up to $1 billion of its Class A common stock. It also said it might sell bitcoin to raise up to $1.25 billion in cash to help cover the dividend payments on its preferred stock and the interest on outstanding debt, as well as to fund its share-repurchase program and cash reserve. Strategy said it had boosted this cash reserve to $2.55 billion as of June 28.

Shares of Strategy gained 13% on Monday.

The announcement follows a rough stretch for Strategy, which recast itself in recent years as a vessel to hold bitcoin. Billions flowed into the company as bitcoin surged to a record, and its strategy spawned dozens of copycats. But the digital currency's monthslong slump has put Strategy and other crypto-treasury companies in a bind.

By the end of Friday, the company's common shares had logged eight straight days of losses and were down by more than 80% from their November 2024 peak. And Stretch, its biggest and most-popular preferred stock, hit a record low, trading 25% below its par value of $100. (Stretch gained 12% Monday, though it still trades 16% below par.)

With its common stock beaten down, the company's mNAV, or its enterprise value divided by the value of its bitcoin holdings, dipped below one on Friday. In other words, investors now value Strategy at less than its underlying bitcoin stash. This discount effectively freezes Strategy's ability to issue new common shares to buy more bitcoin because doing so would dilute existing shareholders.

Strategy also faces hurdles to issue new preferred capital because of Stretch's deep discount. To draw investors back, the company had to hike its already-hefty annual dividend of 11.5%. On Monday, Strategy said it would raise the dividend on Stretch to 12%, starting on or after July 1.

Compounding Strategy's woes, bitcoin recently dipped below the psychologically important threshold of $60,000, adding macro pressure to Strategy's balance sheet and decreasing the value of its bitcoin stash. Strategy holds 847,363 bitcoin valued at about $51 billion, based on current prices.

Strategy's current dilemma marks a big pivot from how its bitcoin experiment began and a retreat from its long-held doctrine: Never sell bitcoin. Saylor, co-founder and executive chairman of Strategy, began transforming his software-intelligence company into a bitcoin hoarder in August 2020.

Servicing the dividends on its preferred stock and interest expense on its convertible debt has become a critical challenge for Strategy. The company has relied mainly on issuing new shares to cover these expenses and recently sold 32 bitcoin to fund preferred dividend obligations.

Strategy's decision in May to use its cash reserve to repurchase $1.5 billion in zero-coupon convertible senior notes due in 2029 proved costly. The buyback reduced the funds available to cover preferred dividend obligations, ultimately sending shares of Stretch into a tailspin.

With the recent boost to its cash reserve, Strategy said it expects to cover about 17.4 months of its preferred dividend obligations and interest expenses. To prevent future market fears, the company said it also established a policy of maintaining a minimum reserve equal to at least 12 months of dividend and interest expense coverage.

Write to Vicky Ge Huang at vicky.huang@wsj.com

(END) Dow Jones Newswires

June 29, 2026 16:41 ET (20:41 GMT)

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