Strategy (NASDAQ:MSTR) executives said the company’s near-term priority is strengthening its digital credit business, particularly its STRC preferred instrument, rather than repurchasing common shares or paying a dividend on MSTR stock.
During a live investor Q&A moderated by Natalie Brunell, Founder and Executive Chairman Michael Saylor and Chief Executive Officer Phong Le addressed shareholder concerns about common-stock performance, the company’s capital structure, STRC liquidity and the role of Bitcoin in Strategy’s longer-term business model.
Strategy Prioritizes Digital Credit
He said Strategy sees an opportunity to develop digital monetary instruments that combine the relative stability of fiat-linked digital currencies with yield derived from digital credit. Saylor said the company believes expanded credit and money-market products tied to the Bitcoin ecosystem could help attract capital from traditional financial markets.
“The single most important thing is for us to stabilize the credit business and to build the most sustainable, highest quality credit business that we can,” Saylor said. “The equity will actually come later.”
Le said the company’s objective is to increase Bitcoin per share, which it has historically pursued through leverage and convertible bonds and more recently through STRC. He said issuing equity above net asset value to buy Bitcoin can be accretive on a Bitcoin-per-share basis, and using proceeds from equity issuance to repurchase STRC below its issuance price can also be accretive.
No Common Dividend Planned
Responding to an investor who said his MSTR investment had declined substantially, Le said common shareholders remain the company’s “most important priority,” but said Strategy does not plan to pay a common-stock dividend.
Le said Strategy believes capital is better deployed toward making STRC successful and using the resulting financing capacity to acquire Bitcoin. Saylor said investors seeking dividend income should consider the company’s preferred instruments, including STRC, STRK and STRD, rather than common equity.
Saylor characterized MSTR as amplified exposure to Bitcoin, saying the common stock can fall more sharply during Bitcoin drawdowns but is intended to outperform during stronger Bitcoin markets. He said MSTR investors should have at least a four-year investment horizon, with seven to 10 years being preferable.
Strategy is open to repurchasing MSTR if the shares trade at a substantial discount to net asset value, Saylor said. However, he said MSTR was not then trading at such a discount, while STRC was trading below par. As a result, the company views STRC repurchases as a higher priority.
STRC Trading Range and Liquidity
Saylor said Strategy intends to keep STRC within a target range of $99 to $100 and does not want the instrument to trade materially above $100. He argued that stable pricing around par supports liquidity and gives investors confidence they can buy or sell the instrument without meaningful price uncertainty.
He said the company would use its resources to support STRC if it falls below par, while also issuing supply near $100 if demand drives the security above that level. Saylor said the approach is designed to create a low-volatility, high-liquidity digital credit instrument rather than one that trades over a wide range.
Le said a key lesson from STRC’s recent drawdown and recovery was the importance of maintaining U.S. dollar liquidity to support dividend payments. He said Strategy now has $4.8 billion in U.S. dollars and may add to its dollar reserve or other forms of dollar liquidity as it raises capital in the future.
Strategy also learned it must be prepared to both buy and sell Bitcoin and STRC, Saylor said, as part of dynamically managing its Bitcoin reserves, restricted and unrestricted cash, and capital structure.
Institutional Adoption and Cash Reserves
Le said the investor mix for Strategy’s digital credit products has shifted from roughly 80% retail and 20% institutional to approximately 70% retail and 30% institutional. He said retail investors tend to adopt new product categories earlier, while institutions generally seek one to three years of dividend and trading history before increasing allocations.
Saylor said Strategy expects its dollar cash balances, Bitcoin reserves and unrestricted operating cash to increase over time. The company could use that capital opportunistically to repurchase credit instruments, common stock or debt, or to acquire Bitcoin, he said.
Le added that additional cash reserves could support Strategy’s corporate credit rating, currently B-minus according to his remarks. However, he said the more significant issue for ratings agencies is whether Bitcoin is recognized as capital on the company’s balance sheet.
On a proposed MSCI policy that could remove Bitcoin treasury companies from certain indexes, Le said MSCI-related holdings represented about 3% to 4% of Strategy’s current shares. He said an exclusion could create selling pressure over time but described the potential impact as immaterial to the company.
Saylor said Strategy remains focused on creating digital credit rather than acquiring unrelated cash-flowing businesses. Adding such businesses would complicate the investment case for equity, derivatives and credit investors, he said.
“We’re laser focused on our business model,” Saylor said. “We want to create the world’s best credit.”
About Strategy (NASDAQ:MSTR)
Strategy, formerly known as MicroStrategy, Incorporated (NASDAQ: MSTR) is a global provider of enterprise analytics and mobility software. The company’s flagship platform offers business intelligence, data discovery, and advanced visualizations that enable organizations to analyze large volumes of data and deliver actionable insights. In addition to traditional on-premises deployments, Strategy provides a range of cloud-based services and managed offerings that allow customers to leverage the power of its analytics tools without managing complex infrastructure.
Founded in 1989 by Michael J.
