Strategy's $176.3 million STRC buyback removes about $21 million a year of 12% dividends

The week's split is lopsided: bitcoin took 14.0% of the $205.0 million Strategy spent across the two uses ^[14], and the buyback ran 6.1 times the bitcoin purchase ^[11]. Whether the preferred is crowding out bitcoin depends on how the buyback is triggered. Strategy has said it will support STRC when it trades below par and scale back purchases as the price approaches that level ^[10]. The $176.3 million bought about 1.77 million shares ^[3], an average of $99.60 a share ^[12], or 0.4% under the $100 stated amount ^[15].

We think the view that Strategy's cash is going to its 12% obligation is true of this week and unproven for the quarter. Independent analyst Shanaka Anslem Perera wrote that Strategy's filings "allocate 9.5% of the raise directly to bitcoin purchases. Other disclosed uses included a dollar reserve, cash, dividends and preferred-share buybacks." ^[5] On a $5.41 billion raise, 9.5% is about $514 million ^[18], which leaves $4.9 billion for the other uses ^[19].

Perera does not read that as a halt. He said: "That does not mean they stopped buying BTC. Cash retained can fund later purchases, and strengthening the balance sheet can benefit shareholders." ^[6]

Saylor posted "There's always room for more orange" on X ^[8], and the next 8-K will show whether it meant a bigger bitcoin purchase. If that filing shows bitcoin buying above the repurchase total while STRC is still near par, the lopsided week was timing and our view is wrong. If repurchases still outrun bitcoin purchases at that price, the 12% obligation is taking the allocation.