Bitcoin Giant Strategy Slashes Cash Reserves by 61% to Repurchase $1.5 Billion in Debt
Strategy reduced its cash reserves from $2.25 billion to $871 million after extinguishing $1.38 billion in debt, significantly cutting its liquidity buffer. The firm, which holds 843,738 Bitcoin valued at $64.7 billion, took this step to avoid selling Bitcoin at low prices and to address its considerable debt load. Previously, analysts considered Strategy’s large cash reserve a prudent move, but recent debt repayment depleted 61% of that buffer, leaving less available to pay preferred stockholders, whose annual dividend obligation is $1.71 billion at an 11.5% yield. Despite market speculation, the likelihood of Bitcoin sales by Strategy has decreased from 85% to 71% among traders. Leadership stated intentions to rebuild cash reserves through various digital asset and equity sales depending on market conditions. Shares rose 3.7% recently but remain well below last year’s peak, while Bitcoin's price has fallen 12% year-to-date. After repurchasing $1.5 billion in convertible notes, Strategy still holds $6.7 billion in outstanding, potentially convertible debt.
