Strategy (MSTR), the world’s largest corporate holder of Bitcoin, has aggressively expanded its cash reserves to $2.2 billion. The move, finalized Monday through a $748 million stock sale, provides the company with a critical liquidity cushion to navigate market volatility and potential “Bitcoin winters”, a report by CoinDesk said.
The beefed-up reserve acts as a strategic “USD battery,” designed to insulate the company from the cyclical nature of the crypto market. According to company data, this $2.2 billion war chest provides approximately 32 months of coverage for its dividend and debt obligations.
The reserve is primarily earmarked for:
- Preferred Stock Dividends: Servicing five series of preferred stock (STRK, STRC, STRF, STRD, and STRE), which require roughly $824 million in annual payments.
- Operational Stability: Ensuring the company can maintain operations through the next Bitcoin halving, projected for April 2028.
A significant test for MicroStrategy’s liquidity arrives in September 2027, the “put date” for a $1 billion convertible note. At this time, bondholders can require the company to repurchase the debt.
The company’s strategy for this milestone depends heavily on its stock price:
- Equity Conversion: If MSTR shares trade above the $183 conversion threshold, the notes would likely convert into equity.
- Cash Settlement: If shares remain below that level (they currently trade near $165), Strategy now has sufficient cash to settle the principal without distressed selling of its Bitcoin.
