Strategy establishes a $1.44 billion Dividend Reserve Fund to pay dividends and debt interest
BlockBeats News, December 1st, according to SEC filings, Strategy Company announced the establishment of a $1.44 billion USD reserve fund, specifically for the payment of preferred stock dividends and existing debt interest. The source of this reserve fund is the proceeds from the sale of Class A common stock by the company under a market issuance plan.
Strategy Company currently plans to maintain a reserve size that covers at least 12 months of dividend payment needs, and intends to gradually strengthen the reserve fund size, with the ultimate goal of building a buffer fund that can cover 24 months or more of dividend payments. The existence, terms, and size of this reserve fund are entirely at the company's discretion, and Strategy will dynamically adjust the reserve fund size based on market conditions, liquidity needs, and other factors.
It is worth noting that this move may be a countermeasure against FUD in the market. Since Strategy follows a pattern of "issuing debt to buy coins - coin price rises - MSTR stock price soars - issuing debt again to buy coins," the market is concerned that if the Bitcoin price weakens, Strategy may be forced to sell coins due to a lack of cash to pay dividends. BlockBeats analyzed its situation in detail in the article "The Tribulation of MSTR: Shorting and Palace Intrigue" published in "Observing the Beatings."
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