Strategy Shifts Focus to STRC Buybacks Over Bitcoin Purchases

Michael Saylor’s Strategy revealed a significant shift in its capital allocation strategy last week, prioritizing the repurchase of its STRC preferred stock over Bitcoin (BTC) acquisitions. According to an SEC filing, the company spent $176.3 million to repurchase approximately 1.77 million shares of STRC preferred stock, far exceeding the $28.7 million allocated to buying 334 BTC. This brought Strategy’s total Bitcoin holdings to exactly 848,000 BTC.

The emphasis on STRC repurchases aligns with a proposal to move several preferred dividends to a daily schedule. Strategy seeks shareholder approval to pay dividends on its STRC, STRF, STRK, and STRD preferred stock every business day, replacing the existing twice-monthly and quarterly schedules. Shareholders will vote on the plan at a special meeting on October 28. If approved, STRC will begin daily dividends in November, while the other preferred stocks will start in January.

While Strategy remains focused on expanding its Bitcoin treasury, Q3 saw a modest increase of only 0.2% in holdings due to sales offsetting most purchases. The company acquired 7,218 BTC in Q3 while selling 5,553 BTC, resulting in a net gain of 1,666 BTC. This marks a significant slowdown compared to Q2, where Bitcoin holdings increased by nearly 11%. Additionally, Strategy reported a preliminary $20.91 billion gain on its digital assets for the quarter, largely due to an increase in the fair value of its Bitcoin holdings.

The company’s strategic shift highlights the growing role of preferred securities in its financial operations. Investors will be watching to see if Strategy maintains this balance between preferred-stock buybacks and net Bitcoin accumulation in the upcoming quarters.