Strategy’s $13,400 BTC floor is illustrative, SEC filing says

Strategy marketed a roughly $13,400 Bitcoin “floor” for STRC, its variable-rate perpetual preferred, and an SEC filing clarifies the number is an illustrative point where the coverage ratio would equal 1.0x. The filing states STRC holders have no direct legal claim on Strategy’s Bitcoin reserve.

The filing defines the metric as the dollar value of Strategy’s Bitcoin divided by a covered-notional denominator. The company’s denominator begins with $6.714 billion of debt, subtracts about $6.69 billion of counted USD assets, then adds $1.284 billion of senior STRF and $9.972 billion of STRC notional, producing roughly $11.28 billion. Strategy reports holding 840,447 Bitcoin; using the filing’s dated price, that produced a displayed coverage of about 5.7x and an unrounded floor near $13,415, commonly cited as roughly $13,400.

The filing cautions the floor depends on a snapshot of inputs. With the same internal inputs fixed, changes in Bitcoin’s market value will alter the displayed coverage ratio but not the computed 1.0x price. Changes to cash balances, counted claims or capital actions will change the modeled floor even if Bitcoin’s market price has not reached that level.

The document shows sensitivity examples. Removing $1.59 billion of USD cash without lowering debt or preferred notional would raise the modeled floor to about $15,313. Removing all $6.69 billion of counted USD assets while holding other inputs constant would push the modeled floor toward roughly $21,381.

In the most recently disclosed week, Strategy sold 18,261,118 MSTR shares for $2.0065 billion. The company used $136.4 million of proceeds to repurchase 1,431,212 STRC shares, added $300 million to its USD Reserve and placed the remainder into USD cash. Strategy sold no Bitcoin. The filing notes the funding came from common issuance and that repurchase authorities remain at about $516.6 million for preferreds and $1 billion for MSTR common, though neither program obligates purchases.

The filing describes how balance-sheet pools are designated. A $5.10 billion USD Reserve is board-designated to cover preferred dividends and debt interest. USD cash can be used for Bitcoin purchases, repurchases, note repayment or reserve growth. Neither pool is pledged to STRC. STRC dividends must be declared and paid from legally available funds; unpaid installments accumulate and compound. In a restructuring scenario, creditors, subsidiary liabilities and senior STRF would rank ahead of STRC, while junior preferred and MSTR common would rank behind.

The filing concludes the $13,400 figure reflects one dated set of company inputs and does not convey solvency, recovery rights or a cap on losses.