Strategy Continues Bitcoin Buying Spree Despite Cash Reserves Drain
Strategy, chaired by Michael Saylor, has resumed buying Bitcoin after months of selling. The company purchased 950 BTC at an average price of $79,670 last week, totaling about $76 million. This latest buy increased its total Bitcoin holdings to approximately 846,000 BTC.
The purchase price was significantly lower than the current market value of Bitcoin, which is trading at $84,388, a 6% increase from the buying price. Strategy's stock has also seen significant growth, with a 25.8% rise over the past week to $159 per share.
The company finances its Bitcoin purchases by issuing new shares of MSTR stock and preferred stock, functioning as a treasury company focused on Bitcoin. The main preferred stock, STRC, offers a 12% annual dividend and aims to trade around $100 a share.
With $1.05 billion available under the preferred buyback program, along with $5.1 billion set aside for dividends and $1.3 billion in cash for other uses, it's likely that Strategy will continue buying Bitcoin at $84,000, albeit in smaller, more intermittent amounts. However, the recent 25.8% gain in MSTR makes new stock sales cheaper, giving Michael Saylor the funds to keep buying.