Strategy Sells $395 Million in Bitcoin and MSTR Stock to Fund STRC Buybacks

Strategy, a company with significant holdings of Bitcoin and MicroStrategy (MSTR) stock, has sold $395 million worth of these assets to buy back its own variable-rate preferred stock (STRC) and expand its cash reserve. The move, which began on July 27 and ended on August 2, saw the sale of 1,638 BTC for $104.7 million and the issuance of about 3.01 million MSTR common shares for another $290.6 million. This capital was used to repurchase STRC shares at a discount, effectively reducing its outstanding preferred stock.

Strategy's treasury now has a cash reserve of $4 billion, which is expected to cover approximately 27 months of preferred dividend and debt interest payments. The company's BTC Yield, a measure of the percentage change in Bitcoin held per assumed diluted share, fell to 3.5% year-to-date, while its quarter-to-date BTC Yield stood at -4.6%. This indicates that Strategy is using its Bitcoin sales as an operational source of liquidity for its securities business.

Strategy's President and CEO, Phong Le, said buying STRC below par allows the company to retire future dividend obligations at a discount while strengthening demand as the shares move toward $100. The company has now spent about $106.2 million on STRC repurchases since launching the program in July. It retains $893.8 million under its preferred-stock repurchase authorization.