Strategy Bitcoin holdings reach new ATH
Those sales had pushed Strategy’s quarterly Bitcoin accumulation into negative territory. The two latest purchases have reversed that decline, leaving the company with a net 1,666 $BTC added during the third quarter with three trading days remaining.
Bitcoin analyst Mark Harvey said Strategy has now repurchased all the Bitcoin it sold during the quarter and added more, extending its streak of consecutive quarters with net Bitcoin growth to 24.
The renewed buying has lifted Strategy’s holdings to a record 847,666 $BTC, acquired for about $63.9 billion at an average price of $75,437. The company has acquired 175,166 $BTC so far this year.
At a current value of about $70.7 billion, the holdings carry an unrealized gain of roughly $6.75 billion, or 10.6%, over Strategy’s aggregate purchase cost.
Meanwhile, Strategy’s performance metrics show a -3.7% Bitcoin yield year-to-date and a negative $BTC Gain of 25,085 $BTC, equivalent to about -$2.1 billion at the prices used in its reporting. Its quarterly $BTC Gain stands at -100,275, valued at about -$8.37 billion.
Strategy financed the latest acquisitions through its at-the-market common-stock program. The company sold about 1.47 million MSTR shares last week for $246.2 million in net proceeds, leaving another $18.84 billion of issuance capacity under the program.
MSTR analyst Zaid had expected Strategy to spend between $250 million and $300 million on Bitcoin during the week, roughly twice the amount ultimately deployed. He said the lower purchase reflected management’s decision to direct capital elsewhere rather than relying more heavily on the company’s cash position.
That other destination was STRC.
Strategy steps up support for STRC
Strategy repurchased about 1.53 million shares of its Variable Rate Series A Perpetual Stretch preferred stock for $151.7 million last week, slightly more than the $142.7 million it spent buying Bitcoin.
The company funded the STRC repurchases with $103.5 million from MSTR share sales and another $48.1 million from its USD Cash balance. It separately used $22.1 million from its USD Reserve to meet preferred-stock dividend obligations.
That left Strategy with about $1 billion of general-purpose cash and $5 billion in its separate USD Reserve as of Sept. 27.
Zaid estimated last week’s STRC repurchases accounted for about 18.9% of the security’s total trading volume, down from 22.8% a week earlier. He described the decline as a modest improvement because Strategy needed to absorb a smaller share of market selling to support the instrument.
The intervention appears to be helping. STRC has climbed to about $99, bringing it close to its $100 stated value after months of trading below that level.
The preferred security has struggled to hold par since May and fell as low as about $71 during Bitcoin’s June selloff. Strategy has since spent more than $1 billion repurchasing preferred shares under a $2 billion program as it seeks to stabilize the instrument.
STRC currently pays a 12% annual dividend, and it increased its payment frequency from monthly to twice monthly in June. Strategy is now proposing another change to make the security more attractive to income investors.
The company has scheduled an Oct. 28 special shareholder meeting to seek approval for daily dividend payments across its four US-listed preferred securities, including STRC, STRF, STRK and STRD.
Under the proposal, STRC would be the first to switch, with its initial daily-schedule payment expected Nov. 2 for holders of record on Nov. 1.
Daily accruals could reduce the time investors wait to receive and reinvest income while smoothing the price distortions that can build around less frequent dividend dates. Strategy has said keeping STRC trading near $100 is one objective of the proposed structure.
That leaves two indicators to watch as the quarter closes. Strategy has resumed consecutive Bitcoin buying with significant cash and equity issuance capacity still available, while STRC has recovered to within about 1% of its stated value after months of support.
The next disclosures will show whether management extends its Bitcoin buying streak into a third week and whether the combination of repurchases and proposed daily dividends can finally push STRC back to par without requiring Strategy to absorb such a large share of its trading volume.
