Strategy skips Bitcoin purchase after raising $333.7M from MSTR sales

Strategy has raised $333.7 million through common stock sales without buying or selling Bitcoin last week, leaving its holdings unchanged at 840,447 BTC.

According to a Form 8-K filed with the U.S. Securities and Exchange Commission on Aug. 17, Strategy sold 3.46 million MSTR shares between Aug. 10 and Aug. 16 through its at-the-market offering program.

The company used $52.4 million of the proceeds to fund twice-monthly dividends on its Variable Rate Series A Perpetual Stretch Preferred Stock, or STRC. Another $132.2 million went toward STRC repurchases, while $149.1 million was added to its U.S. dollar reserve.

Strategy reported no Bitcoin purchases or sales during the seven-day period, a week after it sold Bitcoin to help finance another round of STRC repurchases.

Strategy uses MSTR proceeds for STRC buybacks

During the latest reporting period, Strategy repurchased about 1.39 million STRC shares for $132.2 million under its Digital Credit Securities Repurchase Program.

The company made no repurchases of its STRF, STRK or STRD preferred securities and did not buy back any MSTR common stock.

Following the STRC purchases, Strategy had about $653 million remaining under its $1 billion preferred securities repurchase authorization. Another $1 billion remained available under its separate common stock repurchase program.

Both programs were established under a capital framework approved in late June. As previously reported by crypto.news, Strategy’s board authorized up to $2 billion in security repurchases on June 29, split evenly between MSTR common stock and its preferred securities.

The same framework allowed the company to sell up to $1.25 billion of Bitcoin to fund its U.S. dollar reserve, preferred dividends, interest payments and security repurchases. The authorization did not represent a completed Bitcoin sale and gave Strategy the option to use its BTC holdings as a source of liquidity when required.

STRC, meanwhile, remained below its $100 par value. The preferred stock closed Friday at $94.78, down 1.03% during the session, and fell another 0.12% to $94.67 in Monday premarket trading, according to Yahoo Finance.

Strategy has been using several measures to support the preferred security after it fell well below par earlier this year. In June, CEO Phong Le personally bought $1 million of STRC and said he planned to hold the position until the security returned to par, likely longer.

At the time, Strategy had raised $335.5 million through MSTR sales and increased its dollar reserve to $1.4 billion, according to coverage published in June. STRC was trading below $90 when Le disclosed the purchase.

Strategy Bitcoin holdings remain at 840,447 BTC

Strategy’s decision not to buy Bitcoin last week came immediately after two consecutive weeks of BTC sales.

Between Aug. 3 and Aug. 9, the company sold 1,690 BTC for $108.6 million at an average price of $64,262 per coin. Strategy used the entire amount to repurchase about 1.15 million STRC shares.

The Bitcoin-funded STRC buyback reduced Strategy’s holdings to the current 840,447 BTC, while MSTR sales during the same week generated another $653.1 million. Of that amount, $650 million was directed to the dollar reserve and $3.1 million was added to unrestricted cash.

Strategy had sold another 1,638 BTC between July 27 and Aug. 2 for $104.7 million. Proceeds from that transaction were split between $52.4 million in STRC dividends and $52.3 million in preferred stock repurchases.

The two sales followed Strategy’s first Bitcoin disposal since December 2022. Between May 26 and May 31, the company sold 32 BTC for about $2.5 million, with the proceeds expected to help cover preferred stock distributions.

At the time, STRC had fallen below its $100 reference price while its annualized dividend rate had risen to 11.5%. The first Bitcoin sale broke a multiyear period in which Strategy accumulated BTC without selling any of its holdings.

Strategy later raised STRC’s annual dividend rate to 12% as part of its June capital framework. Management has said the dividend can be adjusted as it seeks to keep STRC trading close to its $100 par value.

Despite the recent disposals, Strategy remains the largest publicly disclosed corporate holder of Bitcoin. Its current 840,447 BTC were acquired for an aggregate $63.36 billion, including fees and expenses, at an average purchase price of $75,385 per coin.

Strategy dollar reserve reaches $4.80 billion

While Bitcoin holdings stayed unchanged last week, Strategy continued building the cash reserve used to meet obligations tied to its capital structure.

The company’s U.S. dollar reserve stood at $4.80 billion as of Aug. 16 after another $149.1 million was allocated from MSTR sales. The total includes expected proceeds from common stock transactions that had been executed but had not yet settled by Sunday.

Strategy created the reserve to fund dividends on its preferred securities and interest payments on outstanding debt. Its board retains authority over the use of the funds.

The cash position has increased quickly in recent weeks. Strategy entered August with a reserve of about $4 billion before adding $650 million during the Aug. 3 to Aug. 9 period, taking the total to $4.65 billion.

At the same time, Strategy has continued issuing common shares to provide liquidity. Last week’s sale of 3.46 million MSTR shares generated $333.7 million, following $653.1 million raised from the sale of about 6.59 million shares during the previous week.

The company still has substantial capacity to raise additional capital through its at-the-market programs. Its latest filing showed about $21.70 billion remained available for MSTR issuance and sales as of Aug. 16.

Strategy also reported no sales under its STRF, STRC, STRK or STRD at-the-market programs during the latest week. Remaining issuance capacity stood at about $17.51 billion for STRC, $1.62 billion for STRF, $2.10 billion for STRK and $4.01 billion for STRD.