The strategy can sell up to $1.25 billion worth of Bitcoin under the “Digital Credit Capital Framework.”

strategy It presented a “Digital Credit Capital Framework” on Monday detailing the terms under which it operates Bitcoin Treasury Company It could sell digital assets going forward, offering an update on how it plans to balance resources as its major preferred stock comes under pressure.

The company’s board of directors approved a program that allows Strategy to sell up to $1.25 billion in bitcoin to fund its cash reserves, make payments on products such as Stretch (STRC), or buy back securities including common stock when deemed appropriate.

“The strategy remains committed to bitcoin as the primary treasury reserve asset,” Michael Saylor, co-founder and CEO, said in a statement. statement. “At the same time, digital credit requires liquidity, discipline and active capital management.”

The framework is intended to “enhance credit quality” and enable the strategy to “minimize expected preferred stock dividend payments as they accumulate,” Saylor noted.

Shortly after the company’s announcement, Bitcoin was trading at around $59,800, down 0.5% over the past day, per CoinGecko data. Strategy shares rose 5% during pre-market trading to $86.52, according to Yahoo Finance.

In the announcement, the strategy did not disclose the purchase of Bitcoin, but instead noted that the so-called US dollar reserve had been rebuilt to $2.55 billion. The company had allocated $2.25 billion at the beginning of this year to manage dividends and debt.

The strategy noted that, at its current level, the company’s cash hoard could cover approximately a year and a half of dividends. In the event of a $1.25 billion Bitcoin sale, the company said it had enough resources to cover dividend costs for approximately 26 months.

Analysts have called on the company to provide more cash following the stock strategy slim To cover recurring costs for 14 months only. Going forward, the strategy said it will hold enough cash to cover the dividend for at least a full year.

The company noted that STRC’s dividend has been raised by 50 basis points to 12%, raising the product’s dividend rate for the eighth time. In recent weeks, STRC has deviated more than 25% from its notional value of $100, the level at which it was designed to trade.

The company stressed that “the measures announced today aim to support this goal by enhancing the liquidity of preferred dividends, improving market confidence in the strategy’s digital credit securities, and providing the company with additional tools to allocate capital.”

STRC jumped to a high of $82.50 before the opening bell, according to Yahoo Finance. On Friday, the preferred stock marketed as low-volatility fell to a low of $71.25, suggesting that market conditions were affecting investors’ confidence in the dividend-paying product.

The strategy noted Monday that it may not increase STRC’s earnings “solely because” the product is trading below par. With STRC hitting record lows, analysts expected the company purchasing Bitcoin to raise the product’s dividend in response.

As part of its framework, the strategy said it could buy back $1 billion worth of preferred shares, including alternatives such as Strife (STRF), and $1 billion worth of common stock to take advantage of “market turbulence” with funds separate from the U.S. dollar reserve.

The buyback program is expected to focus on STRC initially, the strategy said, noting that purchases at a discount may reduce recurring costs of the product. In less than a year, Strategy issued more than $10 billion worth of preferred stock.

As the strategy moved to rebuild its cash reserves in recent weeks, some onlookers noted that the activity chipped away at the company’s bitcoin per share, which had been the company’s north star in terms of shareholder value.

Going forward, the company has indicated that it will not release any moreCommon stock can buy Bitcoin unless the company is valued at a premium to its holdings. On Monday, the company’s so-called mNAV stood at 0.99, representing a slight discount.

Meanwhile, the company’s Bitcoin stock remained unchanged at 847,363 BTC. At the current level of digital assets, the company’s holdings are worth approximately $51 billion. This means that Strategy’s Bitcoin stock showed losses of approximately $13.1 billion on paper.

At Myriad, a company-owned forecasting marketplace Decryption Parent company Dastan, Traders anticipation There is a 15% chance that the strategy will hold more than 1 million BTC before the end of the year. That represents a slight improvement from the 14.5% odds a week ago.