Getting the Capital Engine Humming Again

Research evidence excerpt

Getting the Capital Engine Humming Again

July 1, 2026

variety of factors, including STRC trading levels, credit spreads, BTC price,

reserve coverage, and overall capital structure, rather than automatically

lifting the rate whenever the peg breaks. We believe this effort is key

to unlocking the stock: get STRC back to par, the credit issuance engine

restarts, and BTC accumulation begins again at scale, and MSTR common

re-rates.

Bitcoin is the future, but cash is king in the present. We believe MSTR’s

USD Reserve remains the primary concern for investors, as the recent

drawdown led to significant selling pressure. However, we view Monday’s

announcement as a key first step in addressing this concern. MSTR

bolstered the USD Reserve to ~$2.55B (~17.4 months of coverage) and

is now required to hold a minimum of 12 months of dividend/interest

coverage with the reserve now ring-fenced for just this, unless given Board

approval. Management flagged the importance of striking the right balance

between BTC/USD reserves, a slight deviation from focusing solely on BTC

purchases, but a key driver of building back investor confidence. We note,

the common equity and preferred buybacks would be funded outside

the USD Reserve and the BTC monetization program (~$1.25B) is Board-

approved expressly to grow the reserve or fund buybacks, which when

combined with the existing reserve, puts total preferred dividend liquidity

at ~$3.8B (~25.9 months).

Converts are a problem for another day (or year). While MSTR's

convertible debt has been perceived by bears to represent an impending

"debt wall," especially given the first put date is September 2027,

management was quite clear that the company has no intention of

addressing the converts until necessary. And if they did become a concern,