Strategy Stock Jumps as Saylor Shifts Focus to Buybacks
Shares of Strategy (MSTR) surged by 2.8% in early trading after the company's executive chairman, Michael Saylor, shifted corporate cash toward stock buybacks while reducing Bitcoin purchases. The company acquired 334 Bitcoin for $28.7 million last week, a significant slowdown compared to the 1,665 BTC it bought the previous week.
Instead of allocating all excess cash to cryptocurrency, Strategy spent $176.3 million to repurchase approximately 1.77 million shares of its Stretch (STRC) preferred stock, which offers a 12% annual dividend. The buyback was funded entirely from cash reserves, while the Bitcoin purchase was financed through $13 million in cash and $15.7 million raised by selling 92,894 new common stock shares.
The company estimates a $20.91 billion gain on its Bitcoin holdings for the third quarter, thanks to a strong price recovery in crypto. This allowed Strategy to reverse a $4.12 billion tax asset tied to earlier paper losses. With Bitcoin trading near $86,138, Strategy’s total stash of 848,000 BTC is now worth about $72.4 billion. The company also maintains $4.88 billion in a dollar reserve for dividends and interest, alongside $833.4 million in plain cash reserves.
Shareholders are set to vote on October 28 on a proposal to pay daily dividends across the firm’s four preferred stock types. Meanwhile, rival firm Strive (ASST) outpaced Strategy’s weekly Bitcoin haul by purchasing 2,000 Bitcoin for $169 million, paying an average price of $84,422 per coin.
Wall Street currently has a Strong Buy consensus rating on Strategy stock (MSTR), based on 13 unanimous Buy ratings issued in the last three months. The average stock price target of $234.85 suggests about 41.6% upside potential.