Led by Michael Saylor, Strategy (formerly MicroStrategy) executed consecutive weekly Bitcoin purchases for the initial time since June, rebuilding its reserves following the sale of some cryptocurrency earlier in the quarter.
On September 28, the firm announced the acquisition of 1,665 Bitcoin totaling $142.7 million for the week ending September 27, with an average price of $85,681 per token. This followed a preceding weekly buy of 950 BTC valued at $75.7 million, concluding a three-month period devoid of back-to-back weekly acquisitions.
The newest purchase exceeded the prior week’s buy by about 75%, signaling a ramp-up in accumulation after months characterized by alternating purchases, pauses, and occasional sales by Strategy.
Strategy Bitcoin holdings reach new ATH
Those previous sales had pushed Strategy’s quarterly Bitcoin accumulation into negative territory. However, the two most recent buys have reversed that dip, leaving the company with a net addition of 1,666 BTC throughout the third quarter with three trading days remaining.
Mark Harvey, a Bitcoin analyst, noted that Strategy has successfully repurchased all the Bitcoin liquidated during the quarter alongside additional amounts, pushing its streak of consecutive quarters showcasing net Bitcoin growth to 24.
This renewed purchasing activity has elevated Strategy’s total holdings to a record 847,666 BTC, acquired at roughly $63.9 billion with a mean price of $75,437. Throughout the year, the enterprise has accumulated 175,166 BTC.
Valued presently at roughly $70.7 billion, the stockpile yields an unrealized gain of approximately $6.75 billion, or 10.6%, relative to Strategy’s aggregate acquisition cost.
Simultaneously, performance metrics for Strategy indicate a -3.7% year-to-date Bitcoin yield alongside a negative BTC Gain amounting to 25,085 BTC, translating to roughly -$2.1 billion based on reporting prices. Its quarterly BTC Gain rests at -100,275, carrying a valuation of approximately -$8.37 billion.
Funding for these latest acquisitions came via the company’s at-the-market common-stock program. Last week, Strategy sold roughly 1.47 million MSTR shares yielding $246.2 million in net proceeds, leaving an additional $18.84 billion in issuance capacity within the program.
Zaid, an MSTR analyst, anticipated Strategy would allocate between $250 million and $300 million toward Bitcoin over the week, which is approximately double the capital ultimately deployed. He explained that this lower purchase amount stemmed from management’s choice to allocate capital elsewhere rather than drawing more heavily upon cash reserves.
That alternative destination was STRC.
Strategy steps up support for STRC
Last week, Strategy bought back approximately 1.53 million shares of its Variable Rate Series A Perpetual Stretch preferred stock for $151.7 million, slightly surpassing the $142.7 million spent on Bitcoin purchases.
Funding for the STRC repurchases drew upon $103.5 million derived from MSTR share sales alongside $48.1 million taken from its USD Cash balance. Additionally, the company utilized $22.1 million from its USD Reserve to cover preferred-stock dividend obligations.
Consequently, Strategy retained approximately $1 billion in general-purpose cash alongside $5 billion within its separate USD Reserve as of September 27.
Zaid estimated that last week’s STRC buybacks constituted roughly 18.9% of the security’s overall trading volume, marking a decline from 22.8% the prior week. He characterized this reduction as a favorable enhancement, indicating that Strategy absorbed a smaller fraction of market selling to prop up the instrument.
This market intervention appears effective, as STRC has climbed to about $99, positioning it near its $100 stated value after lingering below that threshold for months.
The preferred security struggled to maintain par value since May, plummeting down to roughly $71 during the June Bitcoin selloff. Since then, Strategy has allocated in excess of $1 billion toward repurchasing preferred shares under a $2 billion program designed to stabilize the asset.
Presently, STRC yields a 12% annual dividend, having transitioned its payment frequency from monthly to twice-monthly in June. Strategy is now advancing a further modification to heighten the security’s appeal among income-focused investors.
An October 28 special shareholder meeting has been scheduled by the firm to secure authorization for daily dividend disbursements spanning its four US-listed preferred securities: STRC, STRF, STRK, and STRD.
Under this proposed framework, STRC would pioneer the shift, with its initial daily-schedule distribution anticipated on November 2 for investors registered as holders on November 1.
Implementing daily accruals could minimize the waiting period for investors to collect and compound income, simultaneously smoothing out price fluctuations that typically form around less frequent dividend distribution dates. Strategy noted that maintaining STRC trading close to $100 remains a primary objective of this proposed structure.
As the quarter approaches its close, two main indicators warrant attention. Strategy has restarted consecutive Bitcoin purchases while maintaining substantial cash and equity issuance capacity, and STRC has rebounded to within roughly 1% of its stated value following months of corporate intervention.
Subsequent disclosures will reveal whether management prolongs its Bitcoin acquisition streak into a third consecutive week, and whether the dual approach of share buybacks and proposed daily dividends can successfully restore STRC to par without necessitating that Strategy absorb such a massive proportion of its trading volume.
Frequently Asked Questions
- How much Bitcoin did Strategy acquire in its latest purchases? Strategy bought 1,665 Bitcoin for $142.7 million during the week ended September 27, following a purchase of 950 BTC for $75.7 million the previous week.
- What is the total size of Strategy’s Bitcoin holdings? The company’s holdings have reached a record 847,666 BTC, acquired at a cost of roughly $63.9 billion.
- How does Strategy fund its Bitcoin and preferred stock purchases? The company finances these acquisitions through its at-the-market common-stock program, alongside cash balances and its USD Reserve.
- What changes is Strategy proposing for STRC dividends? Strategy has proposed shifting to daily dividend payments across its US-listed preferred securities, starting with STRC, to make the instrument more attractive to income investors.
