Strategy’s Cash Falls 72% as STRC Buyback Cap Hits $3B

Strategy’s discretionary cash fell from $1.61 billion on Aug. 30 to $447.3 million as of Oct. 18, according to figures disclosed Oct. 19. The company spent $193.1 million repurchasing nearly 1.94 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock, which trades under the ticker STRC.

Strategy also bought $22.1 million of Bitcoin during the week at an average price of $82,900. Its holdings rose to 848,517 BTC, acquired for approximately $64.02 billion. The company financed about $22 million of the purchase through the sale of 140,872 common shares and used $100,000 of discretionary cash for the remainder.

The latest weekly decline in discretionary cash totaled about $193.2 million, including $193.1 million for STRC repurchases and $100,000 for the Bitcoin purchase.

Strategy’s board increased the authorization for STRC repurchases by 50%, from $2 billion to $3 billion. The company has spent about $1.84 billion buying the preferred stock since the program began in July, leaving approximately $1.16 billion available under the expanded authorization.

Strategy spent about $713.5 million on STRC repurchases in the four weeks ended Oct. 18, including roughly $561.8 million during the three weeks beginning Sept. 28. The latest purchases averaged approximately $99.60 per share. The company’s initial purchases averaged about $86.53 per share.

In July, Chief Executive Officer Phong Le said Strategy planned to make larger purchases when STRC traded at deeper discounts and reduce the pace as the stock moved closer to its $100 stated value.

Strategy also held a separate $4.83 billion USD Reserve, designated mainly for preferred-stock dividends and debt-interest payments. It withdrew $45.5 million from that reserve for preferred-stock dividends.

Strategy’s common stock fell 11.35% over the five trading sessions ended Oct. 16, declining from $154.34 to $136.83. The decline followed MSCI’s Oct. 15 announcement that companies classified as nonoperating entities could become ineligible for its Global Investable Market Indexes. The potential change could affect Strategy and Japan’s Metaplanet.

MSCI is scheduled to publish its final list of affected companies on Nov. 11. The new rules are set to take effect after the Nov. 30 market close. Strategy is scheduled to report its third-quarter earnings on Oct. 29.