Key Takeaways:
Strategy sold 1,690 bitcoin for $108.6 million to repurchase STRC preferred stock as its dollar reserve climbed to $4.65 billion.
The moves "tightened STRC's BTC Credit by 10 bps" and extended the company's "USD Duration" by 143 days to 2.7 years, Michael Saylor, executive chairman at Strategy, said.
Strategy sold the bitcoin between Aug. 3 and Aug. 9 at an average price of $64,262, cutting its holdings to 840,447 BTC acquired for $63.36 billion, or $75,385 per coin. It repurchased 1,152,020 STRC shares for $108.6 million and separately raised $653.1 million by selling 6.59 million MSTR common shares, directing $650 million to its dollar reserve and $3.1 million to cash.
The sale is Strategy's fourth bitcoin disposition this year, trimming its stockpile by about 0.8 percent to 840,447 BTC, or more than 4 percent of the total supply. Investors are watching whether the move is a one-off balance-sheet adjustment or a broader shift toward using its bitcoin reserve as an active financing tool alongside stock issuance, preferred securities and cash.
Strategy said the entire net proceeds from the bitcoin sale went toward repurchasing its variable-rate Series A perpetual Stretch preferred stock. The company still has $785.2 million available under its preferred-stock repurchase program, announced June 29, and $1 billion under its MSTR common-stock repurchase program.
The filing does not disclose the specific cost basis of the 1,690 bitcoin sold, so the $75,385 average purchase price on aggregate holdings alone cannot establish Strategy's realized gain or loss on the transaction. Saylor said Strategy calculates STRC's "BTC Credit" using an internal model assuming 10 percent annual bitcoin appreciation, 40 percent bitcoin volatility and a bitcoin price of $64,915.
The dollar reserve is designed to cover dividends on Strategy's preferred securities and interest on outstanding debt. Bitcoin traded near $65,122 on Monday, with MSTR and STRC both up 0.5 percent in pre-market trading.
The transaction converts a small portion of Strategy's 840,447 BTC reserve into capital for STRC repurchases while separately issuing common stock to substantially increase its dollar reserves. Whether the company leans further on its bitcoin holdings to fund buybacks will shape both STRC's path back toward par and the market's read on the largest corporate bitcoin holder's appetite for selling.
This article is for informational purposes only and does not constitute investment advice.
