On December 2, reports indicated that Strategy (MSTR), led by Executive Chairman Michael Saylor, recently established a $1.44 billion cash reserve while significantly lowering its 2025 profit and Bitcoin earnings targets. RadexMarkets views this move as a cautious capital management strategy amid market volatility, alongside continued Bitcoin accumulation, with total holdings now reaching 650,000 BTC. The cash reserve is primarily allocated to safeguarding preferred stock dividend payments, reflecting the company's commitment to shareholder returns.
To address market concerns over sustaining preferred dividend payouts, Strategy and its Executive Chairman Michael Saylor announced the creation of a $1.44 billion USD reserve. RadexMarkets notes that this reserve was funded through last week's common stock offering, with plans to retain sufficient funds to cover at least 12 months of dividends, eventually extending to 24 months or longer. CEO Phong Le stated that the current reserve can cover 21 months of dividends.
Amid Bitcoin's recent price decline (down 5% to approximately $86,000 on Monday), Strategy revised its full-year profit and Bitcoin earnings targets. RadexMarkets highlights that market volatility has pressured projected earnings, prompting the company to adjust its net income forecast to a range between a $5.5 billion loss and a $6.3 billion profit. Bitcoin yield targets were lowered to 22%-26%, with full-year USD-denominated Bitcoin earnings revised down from $20 billion to $8.4–$12.8 billion.
Additionally, the company reported a modest increase of 130 BTC last week, totaling $11.7 million in expenditures at an average price of $89,860 per BTC. This brings total holdings to 650,000 BTC, with an aggregate cost of approximately $48.38 billion and an average purchase price of $74,436. RadexMarkets interprets this as a steady expansion of Bitcoin exposure during market adjustments, alongside raising $1.478 billion through common stock issuance—primarily allocated to the USD reserve.
Strategy's shares fell 4.4% in pre-market trading due to Bitcoin's price decline. RadexMarkets concludes that the company's recent cash reserve buildup, earnings adjustments, and Bitcoin accumulation demonstrate its risk management capabilities and long-term strategic positioning in volatile markets, offering investors clearer financial safeguards.