Strategy Prioritizes Stock Buybacks Over Bitcoin Purchases
MicroStrategy, now rebranded as Strategy, acquired 334 Bitcoin (BTC) for $28.7 million last week, a significant drop from its previous week’s purchase of 1,665 BTC. This latest buy brings the company’s total holdings to 848,000 BTC, as disclosed in a recent SEC filing. Interestingly, Strategy spent $176.3 million on buybacks of its preferred stock, Stretch (STRC), which is about six times the amount invested in Bitcoin.
The company repurchased 1.77 million shares of STRC, a preferred stock offering a 12% annual dividend. Most of the funds for these buybacks came from Strategy’s USD Cash reserve, with $154.1 million allocated for stock repurchases and only $13 million for Bitcoin. The remaining $15.7 million for the Bitcoin purchase was raised by selling 92,894 new MSTR common shares. Strategy has committed to maintaining STRC’s 12% dividend rate until the stock trades steadily near its $100 issue price.
Gold advocate Peter Schiff criticized Strategy, suggesting that the company has lost its Bitcoin-buying power because STRC no longer raises fresh capital. Despite this, Strategy reported a $20.91 billion gain on its Bitcoin holdings in the third quarter. As of the latest Bitcoin price of $86,138, the company’s stash is valued at approximately $72.4 billion, compared to its total purchase cost of $63.97 billion.
Strategy also holds a $4.88 billion USD Reserve for dividends and interest, along with $833.4 million in USD Cash. Shareholders will vote on October 28 on a plan to pay daily dividends across the company’s four preferred stocks, marking a shift as more cash is directed toward stock dividends rather than new Bitcoin acquisitions.