Invest1 publisher2 min readPublished
Strategy's common shareholders are paying to lift STRC back toward par
Strategy sold $246.2 million of new common stock last week and put $103.5 million of it into buying back STRC preferred below its $100 par. Those same common holders decide on October 28 whether the four preferreds move to daily dividends.
The Investor · Invest desk
What happened
- Strategy bought 1,665 BTC for $142.7 million at $85,681 each, lifting holdings to a record 847,666 BTC against 847,363 at its June 22 peak.
- The full STRC buyback was $151.7 million for 1,534,530 shares, with $48.1 million drawn from the USD Cash balance on top of the equity money.
- USD Cash fell to $1 billion, and the separate USD Reserve stood at $5.02 billion after $22.1 million of preferred dividends.
- If the daily-dividend switch passes, STRC pays first on November 2, with STRF, STRK and STRD following in January 2027.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- cost Common holders carry the dilution behind the preferred's price support, since new share sales paid for about 68% of the STRC buyback.
- constraint An unchanged repurchase program runs out around October 30 at last week's pace, two days after the vote that decides the daily-dividend switch.
- exposure A 9.5% drop in bitcoin from $83,400 would put the whole 847,666-coin stack at its average cost, leaving both common and preferred holders exposed to that fall.
On the figures in Strategy's September 28 filing, as Cryptopolitan reported them, each new common share netted about $167.58 [1] and each STRC share bought back cost about $98.86 [2]. That buyback price is roughly 1.1% under the $100 par the repurchases are meant to restore [6]. Of the $151.7 million the preferred cost, $103.5 million, or about 68%, came from the share sales [3]. Put the other way, 42 cents of every net dollar the at-the-market program raised went to the preferred [4].
The bitcoin record is narrow. Holdings stand 303 coins above the June 22 peak [5], less than a fifth of last week's purchase [6], because Strategy sold coins over the summer and only resumed buying in August [2]. Cryptopolitan reported that those sales were made to balance the company's books [15]. The newest lot started under water. Strategy paid $85,681 a coin [1], bitcoin was near $83,400 and down about 1.4% on the day when the filing landed [14], and the gap across 1,665 coins comes to about $3.8 million [7].
The STRC money did not buy bitcoin. At last week's average price, $151.7 million would have bought about 1,770 coins [8], more than the 1,665 Strategy actually added [1].
The daily-dividend proposal [9] changes when preferred holders are paid, while coupon rates and total dividend obligations stay the same [12]. Preferred holders get no vote on it [10]. At last week's $151.7 million pace, the $723.5 million left under the repurchase program [8] lasts about 4.8 weeks from September 27, to roughly October 30 and two days past the October 28 vote [9].
Should STRC reach par once daily payments begin, the buybacks can stop and the whole at-the-market raise can go to bitcoin. If it stays near $99, Strategy has to enlarge the program, draw more from a USD Cash balance now at $1 billion [7], or let the price slip. A falling bitcoin is the third route, and the cushion there is about 9.5%, the distance from $83,400 down to the $75,437 average cost [10].
I think the middle outcome is the likelier one. Paying the same total obligation in daily pieces [12] does not add to what a holder receives, and $151.7 million of buying last week still left the average repurchase price about 1.1% under par [2]. The counter-case is that a gap that small can close on demand from income buyers who want a daily payment, with no more help from the common. An October filing showing STRC at $100 with the repurchase line untouched would prove this view wrong.
What to watch
- The October 28 common-stockholder vote on moving STRC, STRD, STRF and STRK to daily dividends.
- Weekly 8-Ks through October: whether STRC repurchases keep drawing down the $723.5 million capacity and the $1 billion USD Cash balance.
- STRC's trading price against its $100 par after the first daily payment on November 2, if the change passes.