Strategy Buys Less Bitcoin and Buys Back STRC
The SEC filing shows that Strategy is now putting more of its capital into STRC buybacks than into extra Bitcoin, even as its BTC holdings grew further to 848,000 coins.
Key Takeaways
- Strategy bought 334 Bitcoin last week for $28.7 million and brought its total holdings to 848,000 BTC.
- The company spent $176.3 million buying back preferred stock STRC, far more than it spent on new Bitcoin.
- This year, Strategy has been using its capital more clearly for buybacks and balance sheet management alongside Bitcoin purchases.
Strategy, the company formerly known as MicroStrategy, bought 334 Bitcoin last week for $28.7 million (€25.6 million). During the same period, it spent $176.3 million (€157 million) buying back its preferred stock STRC, more than six times as much. That means capital allocation is once again shifting clearly away from extra Bitcoin and toward common stock and preferred stock.
Less Bitcoin, More Buybacks
According to a filing with the U.S. SEC, the purchase brought total holdings to exactly 848,000 BTC. It was the third week in a row that Strategy bought Bitcoin, but it was a much smaller purchase than the week before, when the company added 1,665 BTC.
Of the money used for the Bitcoin purchase, $13 million (€11.6 million) came from USD Cash. The remaining $15.7 million (€14 million) was raised by selling 92,894 new MSTR shares. For the STRC buyback, Strategy mainly used $154.1 million (€137 million) from that same cash pool. STRC is preferred stock with an annual dividend of 12%.
More Money Going to Capital Structure
The shift fits into a broader trend Strategy has been following this year. In June, the company announced a $1.25 billion (€1.1 billion) program to monetize Bitcoin, along with a $2 billion (€1.8 billion) share buyback plan. That already marked a move away from the earlier focus on simply buying more Bitcoin.
Strategy also said last week that it wants to keep the 12% interest on STRC in place until the stock trades steadily close to its $100 (€89) issue price. Gold advocate Peter Schiff said over the weekend that Strategy may be able to buy less Bitcoin because STRC is no longer raising fresh money. That is his view; the filing at least shows that the company is now using its resources differently.
What Investors Can Take From This
For European crypto followers, this is especially relevant because Strategy still holds one of the largest publicly traded Bitcoin positions in the world. When a company with such a large BTC stash puts more cash into buying back its own financing instruments, it says something about how it wants to manage its balance sheet and future purchases. It also shows that the company’s Bitcoin strategy is less of a straight line than many investors were used to.
The filing estimates that Strategy booked a $20.91 billion (€18.6 billion) profit on its Bitcoin in the third quarter. At a Bitcoin price of about $85,377 (€76,100), the holdings are now worth around $72.4 billion (€64.5 billion), compared with a total purchase price of $63.97 billion (€57 billion). The company also still holds $4.88 billion (€4.3 billion) in USD Reserve for dividends and interest, plus $833.4 million (€742 million) in USD Cash.
Strategy’s STRC remains under pressure while funding through STRC is under strain, which helps explain the recent shift toward buybacks and cash use.
