Strategy allocated nearly nine times more capital toward repurchasing its STRC preferred shares than buying Bitcoin last week, spending $192.4 million on stock buybacks compared to $21.5 million on cryptocurrency acquisitions. According to disclosures published on Oct. 12, the Michael Saylor-founded firm acquired just 250 BTC between Oct. 5 and Oct. 11, extending a slowdown after buying 334 BTC the previous week.
Key Takeaways
- Capital Allocation Shift: Strategy spent $192.4 million to buy back 1,932,145 STRC preferred shares, versus $21.5 million for 250 Bitcoin.
- Treasury Total: Holdings rose to 848,250 BTC, bought for $64 billion at an average price of $75,444 per coin.
- Cash Balances: Unrestricted USD Cash fell $192.9 million to $640.5 million, while restricted USD Reserve funds totaled $4.88 billion.
- Dividend Vote: Shareholders vote Oct. 28 on shifting preferred securities to daily dividend payments.
Accelerated Buybacks Draw Down Unrestricted Cash
Strategy's repurchases of its variable-rate STRC preferred stock increased from $176.3 million during Sept. 28–Oct. 4 to $192.4 million during Oct. 5–11. The company paid an implied average price of $99.58 per share, representing a discount of less than 0.5% to the preferred stock's $100 stated value. At STRC's current 12% annual dividend rate, the latest buybacks reduce future annual dividend obligations by approximately $23.2 million. The company retains $354.8 million in remaining authorization under its digital credit securities repurchase program.
The repurchases have impacted the firm's liquidity structure. Strategy held $5.52 billion in total dollar liquidity as of Oct. 11, split between $4.88 billion in its dedicated USD Reserve and $640.5 million in USD Cash. Under company policy, the reserve is strictly earmarked for preferred dividends and interest payments, meaning STRC repurchases must be funded via unrestricted USD Cash. Consequently, USD Cash fell by $192.9 million from $833.4 million week-over-week. Meanwhile, Strategy raised $21 million by selling 125,183 common shares, using those proceeds alongside $0.5 million in cash to fund the 250 BTC purchase at an average price of $86,194 per coin.
The accumulation slowdown occurred as broader macroeconomic pressures weighed on crypto markets, following a period where Fed rate hike bets pushed Bitcoin down to $81,661 before a temporary Bitcoin rebound to $84,000.
Upcoming Shareholder Vote and Earnings Report
Investors are focused on Strategy's scheduled Oct. 28 shareholder vote to transition its four US-listed preferred securities to daily dividend payments. Under the proposal, STRC would transition first, accruing dividends daily for next-business-day payment without altering its annual yield. If approved, the first daily record date will occur Nov. 1, followed by payment on Nov. 2. Strategy will report its third-quarter earnings on Oct. 29.
Why It Matters
Strategy's heavy focus on STRC repurchases highlights the balancing act between supporting its debt instruments and accumulating spot Bitcoin. Buying back preferred shares near their $100 face value permanently lowers dividend obligations, but it quickly consumes unrestricted cash reserves that would otherwise back coin purchases. Market participants will watch the Oct. 28 dividend vote and Oct. 29 earnings call to gauge whether Bitcoin accumulation accelerates once STRC buybacks taper off.
