Strategy’s STRC preferred stock closed at $99.88 on Monday, its best finish since May, after the bitcoin treasury giant spent roughly seven times more cash buying shares back over two weeks than it spent on BTC.
Key Takeaways
- Strategy repurchased $368.7 million of STRC from Sept. 28 to Oct. 11 while buying just 584 BTC.
- STRC closed at $99.88 on Oct. 12, up from a $71.25 low in June, with Strategy behind about 30% of volume.
- STRC’s Oct. 15 record date and an Oct. 28 vote on daily dividends now decide how long 12% holds.
The Promise
On July 27, with STRC trading in the $80s, Michael Saylor laid out a simple rule and wrote on X:
“We intend to remain a regular, disciplined buyer of STRC below $100. More at deeper discounts, less as STRC nears $100.”
That day’s buyback was 288,930 shares for $25 million at an average price of $86.52 per share.
STRC is Strategy’s variable-rate Series A perpetual “Stretch” preferred stock, a $100-par security that pays a semi-monthly cash dividend and has no maturity date. It is the company’s flagship “digital credit” product, and its price near $100 is the scoreboard Saylor’s team watches most closely.
The Receipts
The rule has been running in reverse, and Strategy’s filings show buybacks growing as STRC climbed toward par:
- Sept. 28 to Sept. 30: 1,033,168 shares for $102.6 million, an average of about $99.31, according to the Oct. 5 filing. No bitcoin was bought.
- Oct. 1 to Oct. 4: 740,634 shares for $73.7 million at about $99.51 per share, alongside 334 BTC for $28.7 million.
- Oct. 5 to Oct. 11: 1,932,145 shares for $192.4 million at about $99.58, against 250 BTC for $21.5 million, as Bitcoin.com News reported Monday.
That adds up to $368.7 million in STRC in two weeks against $50.2 million in bitcoin, roughly 7 to 1. Saylor’s Monday post confirmed the latest week and put Strategy’s stack at 848,250 BTC with one critic calling it “another broken promise.”
Why $100 Is Worth $192 Million
The answer sits in Strategy’s Sept. 30 filing, as the company kept STRC’s dividend at 12% a year and said management will recommend holding that rate “until STRC has demonstrated sustained, healthy trading near $100 per share.” Par is not just a vanity target but the condition written into the dividend policy.
The buybacks also shrink the bill, and retiring 3,705,947 shares that each pay $12 a year removes about $44.5 million in annual dividend obligations. And the buyer is big enough to move the tape. Yahoo Finance’s STRC trading history shows about $649 million changed hands from Oct. 5 to Oct. 9, which puts Strategy’s $192.4 million at roughly 30% of the week’s volume.
It worked, at least on the chart, given that STRC fell as low as $71.25 in June; investor Scott Melker flagged Monday’s five-month high. The last time it closed at $100 was May 14.
The $354.8 Million Clock
The firepower is finite, and Strategy had $620.9 million left in its preferred repurchase program on Sept. 30, $547.2 million on Oct. 4, and $354.8 million by Oct. 11. At last week’s pace, that is less than two weeks’ worth of buying left. Saylor cited $975 million available back in July.
The bitcoin acquistion side tells its own story given that Strategy’s average cost of purchase was $75,444 per coin, while bitcoin sits near $83,300 at press time. The newest 250 coins cost $86,194 each, above where bitcoin trades as of this writing. Saylor still sounded relaxed, posting Monday that “the bears are under control.”
Three Dates That Decide It
- Oct. 15: STRC’s record date for the $0.50 dividend payable Oct. 31, and the day Strategy intends to declare November’s daily dividends if the change passes.
- Oct. 28: A special stockholder meeting votes on daily dividends, which Strategy says are meant to help STRC trade closer to $100.
- The next Monday filing: Whether buybacks shrink now that STRC sits near par, as the July promise said they would.