The MSTR liquidity buffer covers dividends and debt without systemic risk until 2027

Strategy (MSTR), the largest bitcoin BTC$87,642.09 holder among publicly traded companies, increased its dollar reserve to $2.2 billion, giving the company a two-and-a-half-year buffer to meet dividend obligations and the flexibility to navigate a potential “bitcoin winter” if BTC prices follow the conventional four-year market cycle.

The company sold shares to add $748 million to the reserve on Monday. This cash cushion eases liquidity pressures in the short term and supports operations through periods of increased volatility.

The reserve is earmarked for preferred stock dividend payments totaling about $824 million a year, according to the company’s dashboard, across the STRK, STRC, STRF, STRD and STRE series. The runway extends into the next bitcoin BTC$87,642.09 halving, an event that reduces block rewards by 50% approximately every four years, and is likely to occur in April 2028.

The roughly 32 months of coverage supports uninterrupted payments through 2026, 2027 and into 2028.

The first sale date for convertible notes, when bondholders can force Strategy to buy back their bonds, arrives in September 2027 with a principal amount of $1 billion. Based on MSTR’s history of settling prior notes via equity conversion, this would be the preferred option.

If the share price remains below the conversion threshold of $183 per share, Strategy would have sufficient cash. It is currently trading near $165, about 12% below this level.

At or above the conversion rate, the notes would be converted into equity, while prices below would require cash repayment. Additionally, MSTR holds 671,268 BTC, providing additional flexibility as only a small portion of the holdings would be needed if cash settlement was required.

Jeff Walton, chief risk officer at Strive, emphasized the importance of what he calls the company’s USD battery, noting that the current reserve is enough to fully address the September 2027 convertible put, while still leaving another 15 months of preferred dividend coverage.

MSTR shares are down about 45% year-to-date and are trading near $163 a share.