MicroStrategy jumps over 12%, plans to sell $1.25 billion in Bitcoin to buy back shares, breaking the “only buy, never sell” belief.

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Michael Saylor’s company Strategy has made a significant adjustment to the financing structure of its Bitcoin strategy, granting itself greater authority to sell Bitcoin and repurchase securities. This shift marks the departure of the world’s largest corporate Bitcoin holder from its previous "only buying, not selling" one-way accumulation model.

Strategy announced that it may sell up to $1.25 billion worth of Bitcoin to boost its cash reserves, while also launching two $1 billion buyback programs, targeting common stock and preferred stock separately.

The company also stated that it will maintain greater discipline in issuing common stock, especially when the stock valuation is close to the value of its Bitcoin holdings (i.e., when mNAV approaches 1). After the announcement, Strategy’s common stock surged by 12.6% during trading hours.

The background of this adjustment is that the prices of Strategy’s common and preferred shares have come under significant pressure following the decline of Bitcoin, and the financing advantages that have supported the company’s continuous expansion over the years are unraveling. Bitcoin briefly fell below $60,000 after the announcement before rebounding, and was trading at $60,490 at the time of writing.

Shift in Financing Logic: From Expansion and Accumulation to Liquidity Management

The core of Strategy's current strategic restructure is moving from a model dependent on continuous issue of new securities to finance Bitcoin purchases, to a more flexible liquidity management framework—using discounted buybacks or Bitcoin sales to maintain operations when market conditions are unfavorable for financing.

The board has also established a minimum cash reserve policy, requiring the company to always hold at least enough cash for the next 12 months of expected preferred dividends and interest payments. Strategy stated that after selling common stock over the past week, its current cash reserves have reached $2.55 billion, and it has raised the dividend rate of the STRC preferred stock to 12%.

Bitget Wallet research analyst Lacie Zhang commented:

"This framework fundamentally signals that Strategy is managing Bitcoin as a treasury asset with real liquidity discipline, rather than merely as an ideological stance. Whether this is good or bad depends on Bitcoin’s next move—the only important question remains the same."

mNAV Falls Below Parity, Market Reassesses Valuation Logic

Last Friday, Strategy’s mNAV—the ratio between enterprise value (including debt and preferred stock) and the value of Bitcoin holdings—fell below 1. This means the company’s financing premium has disappeared, and the market no longer assigns excess valuation to its Bitcoin holdings. Over the past year, Strategy’s stock price has declined by nearly 80%.

LO:TECH Head of Research Adam Morgan McCarthy commented:

"The compression of mNAV is the bigger risk. If the market starts viewing MSTR as a slow ETF carrying preferred stock obligations, it will be very difficult for this premium multiple to recover, so they must take action."

This change is particularly timely. In recent years, incremental Bitcoin demand has increasingly depended on institutional buyers like Strategy. As doubts rise externally over the company’s ability to continually finance at favorable terms, investors are re-examining not just Saylor’s Bitcoin hoarding strategy, but also the sustainability of a key marginal source of demand in the crypto market.

"Only Buy, Not Sell" Narrative Disrupted, Preferred Stock Structure Under Pressure

At the beginning of June, Strategy disclosed the sale of 32 Bitcoins, its first sale of Bitcoin since 2022.

Although this amount is negligible compared to its total holdings of about $51 billion, its symbolic significance is profound—for years, Saylor built Strategy on a simple premise: financing Bitcoin purchases without selling. This disclosure breaks that narrative and has triggered a chain reaction in the crypto market.

The perpetual preferred stock series set to launch from 2025 originally provided Saylor with a path to continuous Bitcoin accumulation without diluting common shareholders’ equity.

However, such preferred shares are now trading below $80, far under the $100 par value, making continued use of this tool extremely costly for Strategy, and possibly even counterproductive.

Against this backdrop, the market initially interpreted the sale of Bitcoin as a signal that the company was willing to use its holdings to support preferred dividends; however, the result was contrary to expectations, further intensifying concerns over the sustainability of the overall financing structure. This large-scale framework adjustment represents Strategy’s latest attempt to rebuild market confidence under mounting pressure from multiple sources.

Risk Warning and DisclaimerThe market involves risks, and investment should be made with caution. This article does not constitute individual investment advice and does not take into account any user’s specific investment objectives, financial situation, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular situation. Any investment made based on this article is at your own risk. ```