While Strategy (MSTR) has introduced a capital management reform plan to address the sharp drop in preferred stock STRC and dividend burden, Galaxy Digital pointed out that it is closer to buying time than a fundamental solution. Alex Thorn, Head of Galaxy Digital Research, stated via X, "Strategy still has a large amount of preferred stock issued, and a significant obligation to continuously pay dividends. Especially in 2027 and 2028, financial burden is expected to increase further as convertible bonds totaling $6.7 billion mature." He continued, "Strategy's funding structure still relies on the premise that its current structure can raise capital in the market. Particularly, the BTC monetization program, which was controversial in this announcement, could undermine Strategy's core investment thesis. However, from Strategy's perspective, it would have been necessary to secure the option to sell BTC to prevent a temporary cash shortage from escalating into an existential crisis for the company. Nevertheless, in the future, a plan to generate profit from its held BTC must be devised. Given the current sluggish cryptocurrency market, Strategy's latest move will help buy time until the market improves." Strategy announced late last month that it would introduce a capital management framework, including a reserve policy, STRC dividend adjustment, share buybacks, and the sale of $1.25 billion worth of BTC.
