From "never sell" to actively offloading! Strategy (MSTR.US) reduced its holdings by 1,638 bitcoins at a loss and plans to expand its cashing-out target to $5 billion.

As Bitcoin's price hovers around $62,000, significantly below the company's historical holding cost, the once "buy and never sell" Bitcoin giant is undergoing a profound strategic transformation. On August 3, an 8-K filing submitted by Strategy (MSTR.US) to the U.S. Securities and Exchange Commission (SEC) revealed that the company sold 1,638 Bitcoins for $104.73 million over the week ending August 2, at an average selling price of approximately $63,957. This price is about 15% lower than the company's overall average holding cost of $75,419, indicating a per-Bitcoin recorded loss of approximately $11,462. This sale is the largest single-week reduction since Strategy officially launched its "Digital Credit Capital Framework" in late June. The company broke its previous unwritten rule of "never selling," authorizing the sale of up to $5 billion worth of Bitcoin under its current capital plan to augment dollar reserves, pay dividends, and repurchase securities. This amount is a fourfold increase from the $1.25 billion proposal made in early July, signaling that this former "Bitcoin hoarder" is fully transitioning to an active capital management model. The latest sell-off: the financial logic behind the strategic reduction The sale of 1,638 Bitcoins represents the latest round of active reduction since Strategy formally introduced the "Digital Credit Capital Framework" in late June. The average selling price of $63,957 is significantly lower than the companys overall holding cost of $75,419, meaning this transaction is a "loss reduction" on paper. The proceeds from the sale were precisely divided into two main parts: $52.4 million: for paying preferred stock dividends $52.3 million: for repurchasing STRC preferred stock During the same period, Strategy also sold 3,011,361 shares of MSTR common stock through its at-the-market (ATM) program, raising approximately $290.6 million. These funds were again used for defensive allocations$250 million was injected into dollar reserves, $28.9 million repurchased STRC, and $11.7 million was added to cash balances. As of August 2, the companys dollar reserves had reached $4 billion. CEO Phong Le stated during the earnings call that the company has purchased 174,895 Bitcoins year-to-date while selling 3,620. Although the absolute figure of the sales is not small, it represents a very low percentage of the total holding of 840,000 Bitcoins. Strategic transformation: from "buy and never sell" to "active capital management" This series of operations by Strategy marks the most significant strategic turnaround since its transformation into a Bitcoin financial company in 2020. On June 29 of this year, the company officially launched the "Digital Credit Capital Framework," which completely shattered the previous unwritten rule of "never selling." The core elements of the new framework include: Mandatory dollar reserves: requiring the establishment of a large-scale dollar reserve to specifically cover at least 12 months of expected dividend and interest payments Bitcoin liquidation authorization: initially approving the sale of up to $125 million in Bitcoin to supplement reserves, pay dividends, or repurchase stock Dual repurchase authorization: approving $1 billion each for the repurchase of preferred stock and Class A common stock Now, this framework is being fully implemented and at a scale far exceeding initial expectations. CEO Phong Le clarified during the earnings call the threefold purpose of the $5 billion liquidation plan: Enhancing dollar reserves: up to $1.25 billion, raising the cash buffer to approximately $5 billion Paying preferred stock dividends: estimated at about $1.76 billion Driving stock repurchases: an additional $2 billion In total, the planned sale of crypto assets has now reached $5.01 billion, quadrupling the $1.25 billion proposal made in early July. Michael Saylor stated that, under the current plan, the $5 billion is a ceiling, but the total amount could ultimately be higher. Preferred stock management: "eliminating" high-interest debt at an 11% discount In this strategic transformation, managing the preferred stock STRC is one of the core objectives. CEO Phong Le explicitly stated during the earnings call that the company's main corporate goal is to stabilize the trading of STRC around its face value of $99 to $100 in the long term. To this end, Strategy plans to actively manage its capital through the sale of Bitcoin, stock buybacks, dividend adjustments, and stock issuances as needed. It has proven that the company is advancing this goal in a financially astute manner. Last week, Strategy used $81.2 million to repurchase 912,143 shares of STRC stock, at an average repurchase price of about $89.02. Given that the face value of STRC is $100, this means the company effectively canceled high-yield dividend obligations at approximately an 11% discount. In late June, the company raised the STRC dividend rate to an annualized 12.00%. By repurchasing while the stock price is below its face value, Strategy is able to permanently reduce its future preferred stock dividend burden a rather shrewd financial maneuver. On July 31, the board announced a semi-monthly cash dividend of $0.50 per share for STRC preferred stock. As of August 2, approximately $893.8 million remained in the preferred stock repurchase program.