Strategy’s STRC buybacks nearly nine times Bitcoin buys

Strategy spent $192.4 million repurchasing its variable-rate STRC preferred shares from Oct. 5 to 11, nearly nine times the $21.5 million it spent buying 250 Bitcoin.

The Michael Saylor-founded company disclosed the transactions on Oct. 12. Its Bitcoin purchases fell from 334 BTC in the previous reporting period. Strategy paid an average of about $86,194 per coin in the latest period, compared with $85,839 previously.

The latest purchase brought Strategy’s holdings to 848,250 BTC. The company has spent about $64 billion on the holdings, at an average purchase price of $75,444 per Bitcoin. Bitcoin recently struggled to maintain its recovery after a market decline briefly pushed its price toward $80,000.

STRC repurchase spending rose from $176.3 million between Sept. 28 and Oct. 4 to $192.4 million in the following week. Strategy repurchased 1,932,145 shares at an implied average price of about $99.58 each, less than 0.5% below STRC’s $100 stated value.

STRC has a 12% annual dividend rate. At that rate, the latest repurchases would reduce Strategy’s annualized dividend obligations by about $23.2 million, assuming the rate remains unchanged. A July repurchase policy called for larger purchases at deeper discounts and reduced buying as STRC approached $100.

Strategy had $354.8 million remaining under its authorization to repurchase digital credit securities. At the latest weekly spending rate, that authorization would cover about 1.84 weeks of STRC buybacks if the pace remained unchanged.

The repurchases reduced Strategy’s unrestricted dollar liquidity. On Oct. 11, the company held $4.88 billion in its dedicated USD Reserve and $640.5 million in USD Cash, for total dollar-denominated liquidity of about $5.52 billion. USD Cash fell from $833.4 million a week earlier, a decline of $192.9 million that nearly matched STRC repurchase spending.

Strategy raised about $21 million by selling 125,183 common shares during the week. Those proceeds funded most of its Bitcoin purchases, with the remaining $500,000 coming from USD Cash. The company issued no additional preferred stock through its at-the-market programs during the period.

Strategy’s board-approved USD Reserve policy designates the reserve for preferred dividends and interest payments. The company does not have authorization to use the reserve for STRC repurchases. USD Cash can be used for Bitcoin purchases, preferred-share repurchases and other capital-management activities.

Shareholders are scheduled to vote on Oct. 28 on a proposal to shift Strategy’s four U.S.-listed preferred securities to daily dividend payments, with STRC transitioning first. Dividends would accrue daily and be paid on the next business day, replacing STRC’s current semi-monthly schedule without changing its annual dividend rate. If approved, STRC’s first daily record date would be Nov. 1, with payment scheduled for Nov. 2.

Strategy is scheduled to report its third-quarter financial results on Oct. 29, one day after the shareholder vote.