View: Structural issues with Strategy have not been fully resolved, and exploring ways to generate returns from its Bitcoin holdings should be considered.

Mars Finance News, July 3 - Galaxy Research Director Alex Thorn stated that Strategy's capital management adjustments announced on Monday mark a significant turning point for the company. In the weeks prior, Strategy's preferred stock "digital credit" system came under pressure, with its preferred shares STRC falling below the $100 par value and hitting a historic low of $71.25 on June 26, leading the market to question how the company would pay its growing preferred stock dividends. Strategy subsequently announced a new digital credit capital framework, including a board-approved dollar reserve policy, a revised STRC dividend policy, a $1 billion preferred securities repurchase authorization, a $1 billion MSTR common stock repurchase authorization, and a BTC monetization plan. At the same time, the board increased the annualized dividend rate for STRC from 11.5% to 12%, applicable to semi-monthly dividend periods with record dates on or after July 1. Following the announcement, MSTR rose 12.6% on Monday to approximately $92.70, and STRC rose 12.2% to approximately $83.70.

Thorn believes Strategy's approach is prudent but may not permanently resolve the structural issues. The company still has a large preferred stock system and ongoing payment obligations, and faces $6.7 billion in convertible bonds maturing in 2027 and 2028. What the market truly fears is not that Strategy lacks assets, but whether it has sufficient dollar liquidity to pay dividends without harming BTC holders, MSTR common shareholders, or preferred stockholders. By raising over $1 billion in cash through common stock sales, setting a 12-month minimum cash reserve policy, and increasing its current cash coverage to about 17 months, Strategy has bought itself time.

The most controversial part is the BTC monetization plan, which appears to explicitly indicate that Strategy may sell BTC from time to time. He does not want to see Strategy sell Bitcoin, as the company's identity and MSTR's premium are built on its narrative as a long-term BTC exposure vehicle, and selling BTC would undermine that story. However, he also believes that if selling a small amount of BTC can prevent a disorderly capital structure spiral, protect preferred shares, and wait for a better market environment, this path can be justified. Strategy should explore how to generate returns from its BTC holdings without directly selling spot BTC, such as by lending out a small amount of segregated BTC under conservative terms, or using options strategies to capture volatility returns.