Invest2 publishers2 min readPublished
Strategy put more cash into preferred buybacks than Bitcoin in its latest disclosed week
Strategy spent $151.7 million buying back STRC preferred stock and $142.7 million on 1,665 Bitcoin in the week covered by its Sept. 28 filing. Its $18.84 billion of unsold common stock can fund more of both, though Michael Saylor's Oct. 4 post confirms no new purchase.
The Investor · Invest desk
What happened
- Strategy raised $246.2 million in net proceeds by selling 1,469,165 MSTR common shares between Sept. 21 and Sept. 27.
- Holdings reached 847,666 BTC acquired for $63.95 billion in total, an average of $75,437 per coin including fees and expenses.
- Beyond the common program, the filing listed issuance room of $17.51 billion for STRC, $4.01 billion for STRD, $2.1 billion for STRK and $1.62 billion for STRF.
- Strategy ended Sept. 27 with a $5.02 billion reserve for preferred dividends and debt interest, plus $1 billion in separate cash.
- Saylor's orange-themed chart posts on Sept. 20 and Sept. 27 were each followed by a filing disclosing a purchase, first 950 BTC and then 1,665 BTC.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- decision Because the same common-stock sales now fund STRC buybacks as well as coins, the size of a raise says less about the size of the next Bitcoin purchase.
- constraint Using the full $18.84 billion at the Oct. 2 price would take about 118 million new MSTR shares, and each one shrinks existing holders' proportional stake.
- exposure A Bitcoin drop of about 11.5% from $85,250 would bring the whole position down to its average cost, and the newest coins already sit slightly below their $85,681 purchase price.
The odd entry in the Sept. 28 filing is the STRC buyback. Strategy sold common stock partly to retire STRC, a variable-rate perpetual preferred [9], while the same filing listed room to issue more STRC [8]. Bitcoin took about 58% of the common-stock proceeds [1]. The other $103.5 million went to STRC repurchases, and $48.1 million of existing cash followed it [3][4]. Counting every dollar spent that week, coins got about 48% [2].
On paper, capacity is ample. Divide the $18.84 billion left under the MSTR at-the-market program [7] by last week's $246.2 million and it lasts about 76 weeks [3]. Spent only on coins near the Oct. 4 price of $85,250 [12], it would buy roughly 221,000 BTC [4], about 26% more than Strategy holds [5]. Add the four preferred programs and total issuance room comes to $44.08 billion [9].
Last week's shares fetched about $167.58 each in net proceeds [7]. That is roughly 5% above the $159.11 Strategy's dashboard showed on Oct. 2 data [8], when the same dashboard put mNAV at 1.18x [10]. Crypto.news describes mNAV as a company-defined measure that can move with MSTR, Bitcoin and Strategy's capital structure [11].
The next filing could show another purchase funded by common stock, the sequence that followed Michael Saylor's two September posts [16]. Proceeds could instead keep flowing to STRC buybacks, leaving Bitcoin a smaller share of each raise [3]. Or a weaker MSTR price could mean each share sold raises less cash, so the same Bitcoin purchase requires selling more shares.
I think the first case is the likeliest. The two September purchases put Strategy back on consecutive weekly buying after earlier pauses [20], and the program that paid for them still has most of its room [7]. The counter-case sits in the same filing: the preferred buyback outspent the Bitcoin purchase by $9 million [10]. A filing in which common proceeds go mostly to STRC, or an mNAV well under 1.18x, would undercut that view.
Saylor, Strategy's executive chairman [21], wrote "More orange than ever" beside the company's purchase chart on Oct. 4 [14]. The post did not state an amount, a date or a price, and no SEC filing after Sept. 28 had disclosed a purchase as of Sunday [15]. His chart's tracker put the paper gain at about $8.12 billion [18], while crypto.news calculated a market value near $72.3 billion, about $8.3 billion above the official cost [13].
What to watch
- The first SEC filing after the Oct. 4 post: whether it discloses a purchase, and how common-stock proceeds split between Bitcoin and STRC buybacks.
- Strategy's mNAV against the 1.18x reading on Oct. 2 data, since a lower MSTR price means each share sold raises less cash.
- Whether STRC repurchases continue while $17.51 billion of STRC issuance capacity sits unused.