Michael Saylor’s Strategy (NASDAQ: MSTR) disclosed in its October 19 filing that it paid $22.1 million for 267 BTC during the previous week. During the same week, the firm wrote a $193.1 million check to repurchase its own STRC preferred shares and raised the cap on its digital credit buyback program to $3 billion.
Notably, Strategy’s flexible cash pool is thinning as its latest SEC disclosure confirms consecutive weeks where the leading corporate Bitcoin holder has directed far more capital into its own preferred stock than to acquire the digital asset its business is built on.
Strategy announced Bitcoin and STRC purchases
Per Strategy’s 8-K, the firm bought 267 BTC for $22.1 million. The purchase, which closed at $82,900 per Bitcoin, brought the firm’s total holdings to 848,517 BTC. The entire stack cost about $64.02 billion to build at an average $75,446 price.
Strategy funded the purchase by raising approximately $22 million through the sale of 140,872 MSTR shares under its at-the-market program. Strategy did not sell any preferred stock during the week.
However, for consecutive weeks, Strategy’s STRC purchases have come in at multiples of the amount it spent on BTC. Cryptopolitan reported last week that it spent $192.4 million on STRC compared to $21.5 million on BTC.
This week’s $193.1 million for 1,938,780 STRC shares at an average of $99.60 per share is more than eight times what the firm put toward BTC.
Strategy’s board expands repurchase program as cash pile falls to $447 million
The board at Strategy greenlit a plan to expand the firm’s digital credit securities repurchase program from $2 billion to $3 billion. The program’s expansion to $2 billion was approved in September.
With the latest increase, Strategy still has about $1.16 billion in digital credit securities repurchase available. A separate $1 billion authorization for MSTR common stock buybacks remains unused.
The USD Cash account, the dollar pool that Strategy uses to fund buybacks and coin purchases, fell from $640.5 million one week ago to $447.3 million as of October 18.
The USD Reserve, which backs preferred dividends and debt interest, slipped to $4.83 billion from $4.88 billion after the company used $45.5 million to pay preferred dividends.
Executive Chairman Michael Saylor said USD Duration eased to 3.4 years from 3.5, while STRC’s Bitcoin credit widened by one basis point to 53.
STRC has traded under its $100 stated value for much of the year, and Strategy’s goal is to keep it near par with high liquidity.
President Phong Le laid out the logic in a July 27 statement, saying repurchases below $100 “can reduce future preferred dividend requirements at a discount,” as quoted by Cryptopolitan. In short, buying back cheap preferred stock cuts what the company owes in future dividends.
MSCI decision on the horizon
The slowdown in coin buying arrives alongside fresh scrutiny. MSCI signaled new rules that could push Strategy out of its indexes over its stance on “non-operating” companies.
Saylor teased the purchase a day before the filing, posting “We found room for more orange” on Sunday, October 18.
At the ParaFi Investor Day, he outlined a vision for a dollar-pegged, Bitcoin-backed stablecoin he called “perfected” digital money, which he said could pay yields of 6% to 8%.
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