Strategy Buys Back $25M Worth of Preferred Stock at Discount

Strategy Inc., formerly known as MicroStrategy, has initiated its Digital Credit Securities Repurchase Program by purchasing 288,930 shares of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) for $25 million. This move marks the first transaction under the program, which authorizes up to $1 billion in aggregate purchases.

The company repurchased STRC at a price of approximately $86.52 per share, representing a significant discount from its $100 par value. The market price of STRC currently hovers around $86.89.

STRC is a type of preferred stock that carries a variable dividend rate set at 12% annualized and paid out semi-monthly. Despite trading below par, the effective yield for holders who buy at market prices stands at around 13.81%. This reflects the substantial compensation demanded by investors for holding preferred equity in a company dominated by Bitcoin.

The $25 million buyback represents roughly 0.24% of the total notional outstanding value of STRC, which exceeds $10.4 billion.