Michael Saylor’s Strategy Sets Up $1.44B Dividend Reserve But MSTR Stock Continues To Slide

Michael Saylor’s strategy tried to calm investor nerves by creating a $1.44 billion dividend reserve, but its stock continued its decline with another 3% fall yesterday.

A press release said the reserve is meant to cover at least a year of dividends, and ultimately two years, to give the company a financial cushion. CEO Phong Le said it currently exceeds the company’s near-term payout obligation.

Critics have questioned whether Strategy can meet obligations from its preferred stock, a concern that’s amplified by broader market weakness.

Despite the new cash safeguard, MSTR shares remain in a funk and fell as much as 12% yesterday before paring losses.

MSTR has plummeted more than 35% in the past month and over 53% in the past six months. 

Strategy share price (Source: Google Finance)

Despite that, The Kobeissi letter says that even if Strategy’s current debt pile of $8.2 billion is subtracted from the firm’s Bitcoin holdings, the company’s net BTC still stands at around $1.8 billion above Strategy’s current market cap.

But it asks, ”Can Saylor keep buying?”

Strategy has been at pains to ease investor nerves amid growing skepticism over the sustainability of the crypto treasury business model that the company pioneered, and that’s been copied by dozens of others.

At the weekend, Strategy CEO Phong Le said the firm has “more flexibility than ever” to continue buying Bitcoin, that its capital structure is built on long-dated debt and that there is no short-term pressure on its ability to raise funds.

Earlier, Saylor told his 4.7 million followers on X that ”I won’t back down.”

Strategy Buys More Bitcoin

Strategy also announced that it has added to its massive Bitcoin stockpile with another $11.5 million buy. According to an 8-K filing with the US Securities and Exchange Commission (SEC), Strategy bought 130 BTC between Nov. 17 and Nov. 30 at an average price of $89,960. 

Strategy Now Holds More Than 3% Of Bitcoin’s Supply

Following the latest round of buys, Strategy holds a total of 650K BTC on its balance sheet, data from Bitcoin Treasuries shows. This represents more than 3% of BTC’s total supply of 21 million coins. 

Strategy BTC holdings (Source: Bitcoin Treasuries)

Overall, the company’s BTC holdings are valued at $56.52 billion, with the average price for the acquisitions at $74,431 per Bitcoin.

Strategy Reduces 2025 Profit And Yield Targets

The firm’s latest Bitcoin buys came amid a broader crypto market slump, which has seen BTC’s price drop a fraction of a percent in the past week and more than 21% in the last month. 

That correction and and Strategy’s stock plunge has prompted it to revise its year-end profit targets. 

Initially, the company had predicted that BTC would hit $150K by the end of the year, but recently lowered that target to between $85K to $110K. 

In addition to the revised Bitcoin price target, the firm has also adjusted its full-year profit and Bitcoin yield targets. The firm now forecasts a year net income ranging from a loss of $5.5 billion to a gain of $6.3 billion. Meanwhile, the company’s Bitcoin yield target has been cut from a prior target of 30% to a range of 22% and 26%.