Strategy Sets Up Reserve That Can Be Used to Buy Bitcoin

(Bloomberg) -- Michael Saylor's Strategy Inc. is adding a new pool of cash to its balance-sheet toolkit, part of an effort to preserve flexibility as its once-powerful financing model remains under pressure.

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The company said Monday that USD Cash will sit alongside its existing reserve and can be used to buy Bitcoin, fund preferred-stock dividends and debt payments, repurchase securities or meet other corporate needs. Strategy said its newly established USD Cash pool currently holds $1.59 billion.

Strategy's shares and debt securities rallied last week as Bitcoin ran toward $80,000, but the financing flywheel remains impaired, with its valuation premium still well below earlier-cycle levels.

Strategy hasn't bought Bitcoin since the seven days ended June 22. It didn't buy or sell any of the cryptocurrency in the week ended yesterday, according to a filing on Monday.

Strategy sold about $2 billion in common shares over the previous week. The original reserve is now $5.1 billion. The company also repurchased $136.4 million of its Stretch preferred shares.

The stock rose about 2% in pre-market trading.

(Adds share price. An earlier updated corrected the size of the reserve.)

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