Core Viewpoint - Strategy Inc. has established a $1.4 billion reserve to fund future dividend and interest payments, addressing investor concerns regarding its substantial Bitcoin holdings [1] Group 1 - The reserve is specifically aimed at easing investor fears related to the company's status as the world's largest corporate holder of Bitcoin [1] - The establishment of this reserve indicates a proactive approach by the company to ensure financial stability and maintain investor confidence [1]

The crypto sector has struggled lately, which could present a buy-the-dip opportunity.I can't think of anyone who has bet more on Bitcoin (BTC 7.01%), the world's largest cryptocurrency, than Michael Saylor, the executive chairman of the Bitcoin treasury company, Strategy (MSTR 11.31%). In 2020, Saylor invested most of the company's remaining capital to invest in Bitcoin. The decision paid off handsomely, with the stock still up over 550%, despite a 39% decline this year.When asked about his expectations fo ...

The bitcoin treasury company now expects to report between a loss of $5.5 billion and profit of $6.3 billion for the year, down from its October guidance for a profit of $24 billion. ...

Market Overview - The price of Bitcoin experienced significant volatility in November, reaching a high of nearly $110,000 before dropping to around $82,000 [5] - As of recent trading, Bitcoin was priced at $84,200, down from a weekend high of approximately $91,000, with other cryptocurrencies like ether and solana also seeing sharp declines [2][8] Impact on Crypto-Related Stocks - Crypto-related stocks faced declines, with Coinbase and Robinhood each dropping over 6%, and Strategy (MSTR), the largest corporate holder of Bitcoin, seeing an 11% plunge [3] - Bitcoin miner Mara Holdings (MARA) also fell by 8% [3] Investor Sentiment - The decline in cryptocurrency prices reflects a risk-averse sentiment returning to financial markets, indicating that investors are shedding riskier assets amid market uncertainty [4][8] - Bitcoin's price movements are often seen as indicators of broader market sentiment, with prices typically rising in stable markets and falling during periods of high volatility [4] Company Strategy Insights - Strategy CEO Phong Le indicated that the company might consider selling Bitcoin to fund dividends if its market-adjusted net asset value (mNAV) falls below 1.00, with the current mNAV at approximately 1.1 [6]

Doesn't today's MSTR announcement of a $1.44B cash reserve make it even less likely that they'll blow up any time soon?What's the scenario where they're actually in serious trouble? Sub-$50k Bitcoin for 3-4 years+? ...

Core Viewpoint - The company has established a U.S. dollar reserve of $1.44 billion, positioning itself as the world's largest "Bitcoin Treasury Company" to enhance liquidity amid volatile digital-asset markets [1][2]. Group 1: Financial Strategy and Reserves - The U.S. dollar reserve will support dividend payments on preferred stock and interest obligations, aiming to maintain coverage for at least 12 months, with a goal to extend it to 24 months or more [2]. - The reserve will be managed at the company's discretion and may be adjusted based on market conditions and capital requirements [2]. - The company currently holds 650,000 Bitcoin, which is approximately 3.1% of the total eventual supply, and the USD Reserve covers 21 months of dividends [3]. Group 2: Earnings Guidance and Projections - The company has revised its FY2025 earnings guidance due to recent declines in Bitcoin's trading price, projecting operating income to range from a loss of $7.0 billion to a profit of $9.5 billion, and net income from a loss of $5.5 billion to a gain of $6.3 billion if Bitcoin ends 2025 between $85,000 and $110,000 [4]. - Diluted earnings per share are expected to range from a loss of $17.0 to earnings of $19.0 per share, contingent on successful capital raises to achieve the 2025 Bitcoin Yield Target [5]. Group 3: Bitcoin KPI Targets - The company anticipates its Bitcoin yield for 2025 to fall between 22.0% and 26.0%, with Bitcoin dollar gains projected between $8.4 billion and $12.8 billion [6]. - These targets will be pursued through preferred stock offerings, disciplined equity issuance, and continued accumulation of Bitcoin [6]. Group 4: Market Reaction - The announcement has elicited criticism from market observers, including Peter Schiff, who suggested that the establishment of a USD Reserve signals a negative outlook for the company [7].

Market Overview - Bitcoin (BTC-USD) experienced a decline of over 8%, dropping from approximately $91,000 to $84,000, raising concerns about a potential year-end rally despite expectations of a Federal Reserve interest rate cut [1] - The last significant market unwind occurred in August 2024, where Bitcoin fell from over $66,000 to around $54,000, marking an 18% decrease [2] - Bitcoin exchange-traded funds (ETFs) faced their second-worst month in November, with outflows totaling $3.5 billion, and Bitcoin is down more than 30% from its October all-time high of over $126,000 [2] Company Performance - Coinbase (COIN) has seen a decline of roughly 20% over the past 30 days, while Circle (CRCL) and Robinhood (HOOD) have dropped 38% and 16%, respectively [4] - Strategy (MSTR), a significant player in Bitcoin holdings, has declined approximately 40% in the same timeframe, with concerns that lower token prices may force the company to sell Bitcoin to cover dividend and interest payments on debt [4] Strategic Developments - Strategy announced the establishment of a US dollar reserve of $1.44 billion to support dividend payments on preferred stock and interest on outstanding debt [5] - The company added 130 tokens to its Bitcoin holdings last week, increasing its total to 650,000 tokens [5]

Core Viewpoint - MicroStrategy has established a $1.44 billion USD reserve to support dividend payments and service debt obligations, marking a strategic shift in its risk management approach [1][5]. Group 1: Financial Strategy - The newly created "USD Reserve" aims to maintain a balance sufficient to cover at least 12 months of dividends, with plans to extend this coverage to 24 months or more [2]. - The reserve was financed through proceeds from an at-the-market stock offering, indicating a structural change in how the company manages its financial resources [5]. - The company's modified NAV (mNAV) has fallen to 1, meaning its equity value is now trading at the value of its underlying Bitcoin holdings without any market premium [6]. Group 2: Bitcoin Holdings and Market Position - MicroStrategy currently holds 650,000 Bitcoin, which represents approximately 3.1% of the total supply that will ever exist [3][6]. - The establishment of the USD Reserve is intended to insulate the company from short-term Bitcoin volatility while allowing it to continue accumulating Bitcoin [6]. - This move aligns with the long-term vision of becoming the world's leading issuer of "Digital Credit," focusing on stable cash flows rather than solely on Bitcoin appreciation [7]. Group 3: Market Performance - MicroStrategy's stock has declined over 60% from its peak, trading near $177, influenced by weaker Bitcoin prices and changing market sentiment [4]. - The company has revised its fiscal year 2025 guidance, adjusting assumptions for Bitcoin's year-end price due to recent market declines [8].

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Core Viewpoint - Michael Saylor, the executive Chairman of Strategy (MSTR), continues to invest in Bitcoin, recently purchasing an additional 130 BTC for $11.7 million, bringing the company's total holdings to 650,000 BTC, despite market volatility and criticism from Bitcoin skeptics [1][2][5]. Group 1: Bitcoin Holdings and Investments - The recent purchase of 130 BTC was made at an average price of approximately $89,960 per BTC, increasing the total Bitcoin holdings to 650,000 BTC [2]. - The company's cumulative investment in Bitcoin is around $48.38 billion, with an average purchase price of $74,436 per BTC [3]. - Despite a recent price correction, Saylor remains optimistic about Bitcoin, stating the company is prepared for a price drop to $25,000 [3]. Group 2: Market Conditions and Stock Performance - On December 1, Bitcoin experienced a flash crash, dropping to $86,000, which resulted in over $600 million in liquidations [4]. - Following the recent Bitcoin purchase, MSTR stock fell by 4.6% in pre-market trading, slipping below the $170 level amid broader market declines [4]. Group 3: USD Reserve for Dividend Payments - The company has established a $1.44 billion USD reserve to fund preferred stock dividend payments and meet debt obligations, as disclosed in a filing with the SEC [5]. - This USD reserve was funded through proceeds from an at-the-market equity offering, with plans to maintain a balance sufficient for at least 12 months of dividend payments, aiming to extend this to 24 months in the future [6]. - Saylor emphasized that the creation of a USD reserve is a strategic step to better navigate market volatility while pursuing the vision of being a leading issuer of Digital Credit [6].