Strategy spent nearly nine times as much on STRC buybacks as Bitcoin last week

Strategy, formerly known as MicroStrategy, acquired 250 Bitcoin for $21.5 million last week while allocating $192.4 million toward repurchasing its STRC preferred shares.

The Michael Saylor-led firm revealed on Oct. 12 that it purchased just 250 Bitcoin for roughly $21.5 million between Oct. 5 and Oct. 11. This extended a purchasing slowdown that saw acquisitions drop to 334 BTC during the preceding week.

In contrast, Strategy bought back 1,932,145 shares of its variable-rate STRC preferred stock for $192.4 million—amounting to nearly nine times its Bitcoin expenditure—as its STRC repurchase efforts continued.

This spending disparity underscores the competing priorities for Strategy’s capital: growing its Bitcoin reserves while simultaneously supporting its preferred securities.

STRC buybacks consume more capital

This latest acquisition brought Strategy’s total portfolio to 848,250 BTC, acquired for approximately $64 billion at a mean cost of $75,444 per coin.

For its most recent Bitcoin purchases, Strategy paid an average of about $86,194 per coin, compared to $85,839 for the 334 BTC obtained during the prior reporting timeframe.

This deceleration coincides with Bitcoin’s struggle to maintain momentum following a recent market downturn that briefly pulled the cryptocurrency down toward $80,000.

Conversely, the company’s repurchases of preferred stock have kept accelerating.

Capital spent on STRC buybacks climbed from $176.3 million between Sept. 28 and Oct. 4 to $192.4 million between Oct. 5 and Oct. 11.

The organization noted it has $354.8 million in remaining authorization left under its digital credit securities repurchase initiative.

These buybacks have also grown pricier as STRC edges closer to its $100 stated value.

During its most recent buyback phase, Strategy shelled out an implied average price of about $99.58 per share, which reflects a discount of less than 0.5% relative to the preferred stock’s stated price.

This is noteworthy because the firm’s July repurchase guidelines originally outlined buying more aggressively when deeper discounts were available and scaling back purchases as STRC drew closer to $100.

Retiring these outstanding preferred shares through buybacks also cuts down on future dividend obligations. Given STRC’s current 12% annual dividend yield, these latest repurchases eliminate roughly $23.2 million in annualized dividend expenses, assuming the rate remains steady.

Even so, Strategy’s broader goal is to foster enough independent market demand for STRC so that it trades consistently near the $100 mark without requiring continuous, large-scale intervention.

Strategy’s shrinking cash balance raises stakes for October vote

These fast-paced repurchases are simultaneously depleting the capital reserves available for Strategy’s wider treasury operations.

As of Oct. 11, the enterprise maintained $4.88 billion in its designated USD Reserve along with another $640.5 million in USD Cash, bringing overall dollar-denominated liquidity to roughly $5.52 billion.

The USD Cash reserve fell from $833.4 million a week earlier—a drop of $192.9 million—which closely aligns with the capital spent on STRC buybacks.

Separately, Strategy generated about $21 million by offloading 125,183 common shares over the course of the week, while issuing no additional preferred stock via its at-the-market offerings. Those common-stock proceeds covered $21 million of the Bitcoin acquisitions, while the remaining $0.5 million was drawn from USD Cash.

The boundary between these two cash pools is crucial.

Under the board-approved USD Reserve guidelines, this reserve is strictly set aside for preferred dividends and interest obligations. Any alternative uses demand board approval; the business has stated it lacks authorization to tap the reserve for STRC buybacks.

USD Cash, on the other hand, can be deployed to fund Bitcoin acquisitions, preferred-share buybacks, and other capital management tasks.

Consequently, ongoing STRC spending diminishes the unrestricted liquidity accessible for other initiatives unless Strategy secures additional capital.

By way of example, the remaining $354.8 million in preferred-share buyback authorization would last approximately 1.84 weeks at the current weekly pace of $192.4 million, provided that spending rate and authorization level remain unchanged.

Shareholders are set to vote on the daily-dividend proposal on Oct. 28.

Management is pursuing approval to transition its four US-listed preferred securities to daily dividend distributions, with STRC making the switch first.

Should the measure pass, dividends would accumulate daily and be disbursed on the next business day, superseding STRC’s current semi-monthly schedule while keeping the annual dividend rate intact.

Strategy contends this transition could boost liquidity, minimize reinvestment friction, and foster more stable trading behavior around the $100 target for STRC.

If authorized, STRC’s initial daily record date would fall on Nov. 1, with the payout scheduled for Nov. 2.

Furthermore, Strategy is slated to release its third-quarter financial results on Oct. 29—just one day following the shareholder vote—affording leadership another platform to discuss its preferred-stock strategy and the decelerating pace of Bitcoin accumulation.

?Frequently Asked Questions

01Why is Strategy spending more on STRC buybacks than Bitcoin?

Strategy faces competing demands for its capital. While it continues to accumulate Bitcoin, it is also actively repurchasing its STRC preferred shares to reduce future dividend obligations and support the stock’s price.

02How many Bitcoins does Strategy currently hold?

Following its latest purchase of 250 BTC, Strategy’s total holdings reached 848,250 BTC, acquired for approximately $64 billion.

03What is the upcoming shareholder vote about?

Shareholders will vote on Oct. 28 on a proposal to move Strategy’s US-listed preferred securities—starting with STRC—to daily dividend payments to improve liquidity and trading stability.