Strategy Buys $22M in Bitcoin, Buys Back $193M of STRC

Strategy bought 267 BTC for $22.1 million last week and repurchased $193.1 million of its STRC preferred stock, the company said on Monday.

The Bitcoin treasury firm paid an average of $82,900 per coin, including fees, between October 12 and 18, according to an SEC filing. That compares with $86,194 a coin for the 250 BTC it bought the week before, Decrypt reported. Strategy now holds 848,517 BTC, acquired for a total of $64.02 billion at an average of $75,446 per coin.

The purchase is in line with last week's $21.5 million buy, and a fraction of the $142.7 million Strategy spent on Bitcoin in the last week of September.

Strategy co-founder Michael Saylor had hinted at the purchase in a tweet on Sunday, writing: "We found room for more orange."

Strategy paid for the purchase with $22 million raised by selling 140,872 shares of its MSTR common stock through its at-the-market offering program, plus $0.1 million of cash. It sold none of its preferred stock during the week.

The company bought back 1,938,780 shares of STRC, its variable-rate Stretch preferred stock, using $193.1 million of what it calls USD Cash, money set aside for general purposes including buying Bitcoin.

Strategy's board also raised the total authorized under its digital credit securities repurchase program, which covers its preferred stock, to $3 billion from $2 billion. Last week's buyback had left $354.8 million in the program; after this week's purchases and the increase, $1.16 billion remained available as of October 18. A separate program to buy back MSTR common stock has $1 billion left.

The company also used $45.5 million from its USD Reserve, which is meant to cover preferred dividends and interest on its debt, to pay dividends. As of October 18, the reserve held $4.83 billion and USD Cash $447.3 million, down from $4.88 billion and $640.5 million a week earlier.

Strategy and the MSCI rules

The repurchase extends a run of weekly STRC buybacks. Strategy bought back $192.4 million of the stock the previous week, and $176 million the week before that, as it bought $29 million in Bitcoin and posted a $21 billion third-quarter gain. In the last week of September, it repurchased $151.7 million of STRC as it took its holdings to a then-record 847,666 BTC.

The company is also facing possible removal from MSCI's widely tracked equity indexes. On October 15, the index provider finalized a rule that treats "non-operating companies," those whose balance sheets are dominated by a single asset, as ineligible for its Global Investable Market Indexes from the close of November 30. MSCI will publish the list of affected companies on November 11.

Removal would force funds that track the indexes to sell the affected shares. Saylor had urged MSCI to drop what he called a "discriminatory" rule.