- Strategy Inc. is shifting its corporate strategy from relentless Bitcoin accumulation to a more flexible capital management approach that includes potential sales of the cryptocurrency.
- The company has authorized the buyback of up to $1 billion each of its preferred and Class A common shares.
- JPMorgan analysts warned that this shift introduces a new 'two-way flow risk' to the Bitcoin market, as one of the asset's largest institutional buyers may now become a seller.
- The policy change follows a period of significant stress for the company as Bitcoin's price retreat hampered its ability to raise cash through traditional means.
Quotes
“The longer-term story hasn’t changed. Each part of the capital structure is still in competition with other parts, but they’ve effectively kicked the can down the road for a while.”
“Strategy’s new policy of selectively selling Bitcoin to fund preferred-stock dividends and manage its balance sheet had created an “avoidable” two-way flow risk for the market”