Strategy spent almost nine times more on repurchasing its own preferred stock last week than it did on Bitcoin. In a Monday update, the company said it put $192.4 million toward buying back STRC preferred shares and $21.5 million toward 250 BTC.
The gap between those two figures is the real news. A company whose whole identity rests on accumulating Bitcoin is now sending most of its weekly spending into its own capital structure.
The buyback dwarfs the Bitcoin buy
Strategy bought back 1,932,145 shares of STRC, its variable-rate Stretch preferred stock. That leaves $354.8 million of capacity under its preferred share repurchase program.
The prior week followed a similar pattern. While reporting a $21 billion third-quarter gain, Strategy added $29 million in Bitcoin and repurchased $176 million of STRC.
Holdings hit a record, but at a steeper cost
The company’s release says the 250 BTC were acquired between October 5 and October 11 at an average price of $86,194 per Bitcoin, fees included. That brings Strategy’s total to 848,250 BTC, a new high.
Strategy has paid $64 billion in total for its holdings, an average of $75,444 per coin. That means the newest purchase cost more than $10,000 per coin above the company’s lifetime average.
Nearly all of the money came from common shareholders. Through its at-the-market offering program, Strategy sold roughly 125,000 shares of MSTR common stock to raise $21 million, and it paid the remaining $500,000 in cash. No preferred stock was sold during the week.
A large pile of dollars
As of October 11, Strategy had $4.88 billion in a U.S. dollar reserve earmarked for preferred dividends and debt interest. On top of that, it held $640.5 million in cash for more general uses, including Bitcoin purchases.
When the USD reserve was first created, it held $1.44 billion. The separate cash pool came later, after Strategy raised $2 billion through sales of MSTR stock.
Strategy has also proposed letting dividends on its preferred stock accrue 365 days a year. In addition, it has said it could sell up to $1.25 billion of Bitcoin under its digital credit capital framework.
Selling is now an option
A few years ago, that kind of statement from this company would have sounded odd. Yet in September, Strategy CEO Phong Le described selling Bitcoin as the “right trade.” Weeks later, the firm set a new holdings record at the end of the month with a $143 million purchase.
Bettors doubt the pace of buying will pick up much. On a prediction market, traders give Strategy only a 5% chance of passing one million BTC in holdings by year-end. Getting there would take more than 151,000 BTC in about 11 weeks, compared with the 250 coins it bought last week.