Strategy Sells $395M in Bitcoin and MSTR Stock to Fund Preferred Dividends and Cash Reserve

Strategy, the company behind the popular Bitcoin holdings, has sold $395 million worth of BTC and MSTR stock to fund preferred dividends, repurchase STRC shares, and expand its cash reserve to $4 billion. This move marks the company's largest single-year disposal of BTC since it adopted the asset in 2020.

The sales include 1,638 BTC sold for $104.7 million between July 27 and August 2, as well as the issuance of approximately 3.01 million MSTR common shares for another $290.6 million. None of this capital went towards new Bitcoin purchases, but rather towards preferred dividends, STRC repurchases, and expanding its cash reserve.

Strategy's decision to prioritize its preferred stock and cash reserves over additional BTC purchases is largely driven by the trading discount on STRC, a variable-rate preferred stock that Strategy wants to establish as a repeatable funding source for its treasury. To address this issue, the company has repurchased $81 million worth of STRC shares.

Strategy's aggressive Bitcoin sales and common stock issuance have led to a significant expansion of its cash reserve, which now stands at $4 billion. This reserve is expected to cover approximately 27 months of preferred-dividend and debt-interest obligations, reducing the risk that Strategy would need to issue securities or sell BTC under unfavorable market conditions.