Strategy's MSTR, STRC shares recover after brutal week as Saylor unveils new buyback plans

Strategy's MSTR and STRC securities rebounded on Monday after one of their worst weeks on record, as investors digested Executive Chairman Michael Saylor's new capital management framework and bitcoin (BTC) steadied near $60,000.

Strategy's common shares (MSTR) climbed to around $89 during Monday's session after closing out last week at $82.31, a more than two-year low, recovering part of a five-day slide that saw the stock drop more than 30% from a June 22 high near $120. 

STRC, Strategy's variable-rate perpetual preferred stock designed to trade near a $100 par value, rallied above $82 after closing Friday at $73.80, recovering some ground after falling from a June 22 high of $91.70.

The rebound came after Strategy announced a handful of new measures it called a Digital Credit Capital Framework, aimed at regaining investor confidence, especially following the prolonged decline in MSTR and its preferreds.

The company paused bitcoin purchases last week despite raising $1.15 billion through MSTR share sales. Instead, Strategy opted to boost its USD reserve to $2.55 billion while also unveiling a new capital framework focused on strengthening liquidity and giving it some flexibility in its balance sheet.

Strategy's 'digital credit capital framework'

Part of that new framework has Strategy authorizing up to $1 billion in digital credit securities repurchases, including STRC, STRF, STRD, and STRK, with STRC expected to be the biggest priority. The company also approved a separate $1 billion authorization to repurchase its MSTR common stock.

Strategy also raised STRC's dividend rate by 50 basis points to 12% for July and said it would reevaluate the monthly rate based on STRC's trading price, bitcoin volatility, and its USD reserves.

"We will continue to evaluate the rate monthly," Saylor wrote on X. "Our corporate objective is for STRC to trade over time at $99-$100."

Saylor also said Strategy expects to be selective about issuing new MSTR shares, especially with the stock trading so close to 1x enterprise mNAV, a metric that compares the company's total value, including debt and preferred stock to the value of its bitcoin holdings.

Last week's selloff pushed Strategy's enterprise mNAV briefly below 1 for the first time, erasing the dwindling premium it once held over its bitcoin stash. STRC also sank to a record low below $72 during the rout, more than 28% under its intended $100 par value.